Not a trend but a standard - sustainable investments
In addition to the traditional criteria of profitability, liquidity and security, both professional and private investors take ecological, social and ethical aspects into account when making investment decisions. They look at how sustainably companies operate in terms of ecological and social compatibility as well as good corporate governance.
There is now a wide range of securities available in every asset class and form that you can use to pursue sustainability goals in investing - from light green to dark green, as it is called in the financial industry, depending on the investment objective.
In the context of financial investments, it has become common practice to rate companies according to ESG criteria. ESG stands for:
Global trends such as climate change, environmental degradation, shortage of important resources, demographic developments and their social impact are becoming increasingly important to private and professional investors. After all, the capital market also has a responsibility to support an ecologically and socially sustainable economic system that counteracts climate change and the scarcity of resources.
Moreover, sustainability in the portfolio does not cost yield as some studies have now shown. In some cases, investments that take ESG criteria into account perform better in the long term. Sustainable investments are therefore explicitly not to be equated with a loss of return.
The application of ESG criteria offers you as an investor the opportunity to take your individual economic and social orientation into account and to contribute to sustainable developments. The inclusion of ESG criteria is therefore an essential component of responsible and forward-looking investment behaviour which can also help to minimise investment risks.
Different asset classes offer you different opportunities to consider ESG criteria: Equities, ETFs, funds, bonds and certificates. Discover the many ways to combine social and economic aspects.
Through sustainability-focused ESG ETFs, providers often offer exposure to environmentally and socially friendly versions of well-known benchmark indices. As of 2021, there are 320 ETFs and 30 Active ETFs that incorporate sustainability criteria into their composition.
Green Bonds enable targeted investment in environmental projects. There are currently around 330 Green Bonds available for trading on the Frankfurt Stock Exchange.
Some certificates offer exposure to sustainable investment themes. Their performance is linked to shares or indices from ecological, ethical and social sectors.