For example, more and more, consumers are changing the world through their buying decisions. In fact, according to Nielsen, 73% of consumers say they would change their consumption habits to reduce their impact on the environment.1
“When looking at food items like coffee, I want to know first that it’s fair trade. I don’t want to support companies that don’t care about how the animals and/or workers are treated, and I do want to support those that do,” writes a conscious consumer.2 “In other words, I’m willing to spend more (a lot more, in fact) to know that what I’m spending my money on is actually good for the earth and the people on it.”
Yet efforts to effect change extend beyond buying decisions. A quarter of Americans volunteer,3 and more than one-third of Millennials define success as doing work that has a positive impact on society.4
It’s a strategy many are on board with. Almost half (44%) of the United States population describe themselves as sustainability-minded or sustainability-driven when investing.5
Sustainable investing, also commonly referred to as socially responsible investing, is an investment strategy for those who seek sustainable outcomes while pursuing their financial goals.
While we may be at the beginning of the sustainable investing journey, we’re making fast progress. ETFs, exchange-traded funds, which are diversified collections of assets (like a mutual fund) that trade on an exchange (like a stock), are among the fastest-growing types of investment vehicles to access sustainable investment strategies.
BlackRock projects that global sustainable ETF assets will grow from $25 billion today to more than $400 billion by 2028.6
There are many ways to incorporate sustainable investing into your portfolio.
Keep reading to determine which investment approach may work best for you.
If you’re looking to get started with building a sustainable investment portfolio, consider ESG investing, which evaluates companies on their environmental (E), social (S) and governance (G) business practices.
As an example, iShares ESG MSCI USA ETF (ESGU) provides access to higher ESG-rated companies while seeking similar risk and return to the relevant broad market.7 ESGU is one of seven iShares Sustainable Core funds, which allow investors to build a low-cost sustainable portfolio across stocks and bonds.
If you’re interested in a specific issue or seeking to achieve a specific result, consider thematic investing and impact investing.
With thematic investing, you’re focusing on a particular E, S or G issue. Let’s say you want to promote clean energy, for example. iShares Global Clean Energy ETF (ICLN) provides exposure to companies from around the world that produce energy from solar, wind and other renewable sources.8
With impact investing, you’re seeking to achieve a specific, measurable and sustainable outcome. For instance, if you’re looking to make an environmental impact, you could consider iShares Global Green Bond ETF, which holds bonds that are issued to fund environmental projects.9
With sustainable ETFs, you can seek to make an impact while pursuing your financial goals. To get started, think about the issues you’re most interested in and your investment objectives.
Ready to invest in your principles? Visit ishares.com/us to learn more.
1“Unpacking the Sustainability Landscape,” Nielsen, Nov. 9, 2018 https://www.nielsen.com/us/en/insights/report/2018/unpacking-the-sustainability-landscape/
2 Curtin, Melanie, “73 Percent of Millennials Are Willing to Spend More Money on This 1 Type of Product,” Inc.com, Mar. 30, 2018 https://www.inc.com/melanie-curtin/73-percent-of-millennials-are-willing-to-spend-more-money-on-this-1-type-of-product.html
3“Volunteering in the United States News Release,” Bureau of Labor Statistics, Feb. 25, 2016 https://www.bls.gov/news.release/volun.htm
4”Millennials Plan to Redefine the C-Suite, Says New American Express Survey,” American Express, Nov. 29, 2017 https://about.americanexpress.com/press-release/millennials-plan-redefine-c-suite-says-new-american-express-survey
5Sin, Ray and Lamas, Samantha, “Are Your Clients ESG Investors?”, Morningstar, Apr. 22, 2019 https://www.morningstar.com/blog/2019/04/22/esg-investors.html
6BlackRock, as of Oct. 23, 2018. There is no guarantee the projection will come to pass.
7“iShares ESG MSCI USA ETF,” BlackRock https://www.ishares.com/us/products/286007/ishares-esg-msci-usa-etf-fund
8“iShares Global Clean Energy ETF,” BlackRock https://www.ishares.com/us/products/239738/ishares-global-clean-energy-etf
9“iShares Global Green Bond ETF,” BlackRock https://www.ishares.com/us/products/305296/ishares-global-green-bond-etf-fund
Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses, which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
A fund’s environmental, social and governance (“ESG”) investment strategy limits the types and number of investment opportunities available to the fund and, as a result, the fund may underperform other funds that do not have an ESG focus. A fund’s ESG investment strategy may result in the fund investing in securities or industry sectors that underperform the market as a whole or underperform other funds screened for ESG standards.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets and in concentrations of single countries.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments.
The iShares Global Green Bond ETF’s green bond investment strategy limits the types and number of investment opportunities available to the Fund and, as a result, the Fund may underperform other funds that do not have a green bond focus. The Fund’s green bond investment strategy may result in the Fund investing in securities or industry sectors that underperform the market as a whole or underperform other funds with a green bond focus. In addition, projects funded by green bonds may not result in direct environmental benefits.
Diversification and asset allocation may not protect against market risk or loss of principal. Buying and selling shares of ETFs will result in brokerage commissions.
When comparing stocks or bonds and iShares Funds, it should be remembered that management fees associated with fund investments, like iShares Funds, are not borne by investors in individual stocks or bonds.
Investment comparisons are for illustrative purposes only. To better understand the similarities and differences between investments, including investment objectives, risks, fees and expenses, it is important to read the products’ prospectuses.
This information should not be relied upon as research, investment advice or a recommendation regarding any products, strategies or any security in particular. This material is strictly for illustrative, educational or informational purposes and is subject to change.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”). The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with MSCI Inc.
iSHARES and BLACKROCK are registered trademarks of BlackRock. All other marks are the property of their respective owners.
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