For long term investors sustainability is an obvious concern, but for some investors who look only for profits in the next quarter sustainability can be forgotten. The tide is starting to turn as companies that don’t have sustainable practices in place are being beaten by more efficient operations.
The Guardian has outlined why poor investors ignore the environment while providing good reasons to care about it from a financial standpoint.
As a first step, we need to recognise that rapidly declining natural systems are bad news for business. There is a two-way street between the economy and the environment: businesses damage the environment, and the damaged environment then creates risks to the bottom lines of businesses.
But why should members of the investment community care? After all, they are not trying to save the world; they have a fiduciary responsibility to generate returns to their shareholders. Three reasons explain why investors should include sustainability considerations in their decisions, and why doing so is compatible with fiduciary responsibility.