Why social finance deserves more of your attention

Social finance (not to be confused with socialism) is about making money and not screwing up our planet. The and is what makes it special and critical for our future and also opens up great opportunities for growth.

Here are four (out of the many) reasons for social finance -

1.     High performing businesses

If you are looking to invest in businesses that achieve high returns, take a look at the companies focusing on their ESG (Environmental, Social and Governance) performance. These are outperforming those that aren’t. That in itself is a good enough reason to take notice and also follow suit.

Swiss Re, SBI, BlackRock and many others are using ESG metrics to guide billions of dollars of investments.

2.     Global trend

The global trend is to move towards cleaner technology, sustainable business and overall integration with the community. The days of profit over ethics are slowly but surely changing.

Companies such as Patagonia, Natura and Dassault Systemes are a great example that have capitalized on this trend.

3.     Planet’s critical condition

Let’s face it, the planet is in the Emergency room and is only getting worse. However, it is not the planet that needs saving. The planet will be fine without us, it is us that might not survive the impending doom of climate change.

Businesses are a chief reason why we got here, and they are showing promise to get us out of this predicament if we deploy ourselves and our resources towards it.

4.     Chance to be on the right side of history

This is the ethics argument. We are quite possibly at a Tipping Point in history. Our actions in the next few years/decades will decide not only our fate but also of the next generation and probably humanity in general (so, no pressure). It is a glorious opportunity to undo the harm of the past 100 or so years and change our course.

For the better.