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If investing feels a bit like walking into a maze, you’re not alone. But here’s a comforting thought: you can aim for returns and make ethical choices. That’s what responsible investing is all about.
In this sixth article of our Beginner Investor Blog Series, we’ll explore how you can make money while supporting companies that care about the environment, people, and good business practices.
Missed the previous Beginner Investor Blog Series? Read it here:
- Guide to Investing in Ireland
- Grow Your Money with Compounding
- What Is Risk Tolerance?
- Mistakes First-Time Investors Make
- Types of Investments Explained
What if your investments could make a real difference?
Where you put your money, your savings, investments, and pensions doesn’t just shape your future; it also impacts the world around you.
In fact, many people in Ireland today want their investments to do more than grow. They want them to have a positive impact on the planet and society.
Responsible investing lets you do exactly that. It’s about expecting more than just good performance from your money. It’s about selecting funds that support companies dedicated to sustainability, innovation, and ethical practices, ensuring your investments align with your values.
What Is Responsible Investing?
Responsible investing (also called sustainable, ESG, or ethical investing) means you pick investments not just based on potential returns, but also on how companies behave towards the environment, people, and their own governance (management, transparency, etc.).
A significant aspect of this involves integrating ESG criteria into the decision-making process. That means the fund or investor doesn’t just screen out “bad” industries (like tobacco or fossil fuels) but actively looks at how companies handle climate risks, social responsibility, and corporate behaviour.
Also, in some markets (like the EU), investment products must declare how “sustainable” they are. This comes from regulation that requires more transparency about environmental and social impact, so investors like you can make informed choices.
Under EU rules, if a fund calls itself “sustainable”, at least 80% of its assets must genuinely support environmental, social, or governance (ESG) goals. This rule aims to reduce greenwashing, when investment funds exaggerate or misrepresent how environmentally friendly they really are, and make it easier for investors to trust that their money is truly making a positive impact.
A Real-World Example
To make this less abstract, here’s how a “multi-asset ESG fund” might operate:
- Multi-asset means it invests across different types of assets — not only shares but also bonds and other assets that help reduce risk.
- It balances growth and defensive assets, aiming for returns while protecting your investment during market ups and downs.
- The fund managers actively manage the portfolio, adjusting investments as markets and ESG risks change.
- It follows strict sustainability guidelines, ensuring it promotes environmental and social characteristics in line with regulation.
This type of fund provides a built-in “ethical filter” while diversifying risk across various assets.
Be smart with your money. Get a personalised quote today!
Why Responsible Investing Is Worth Thinking About
Responsible investing isn’t just about doing good; it can also make financial sense.
Companies that prioritise sustainability and good governance tend to make more informed long-term decisions. They tend to manage risks better, attract loyal customers, and avoid costly scandals, all of which can lead to more stable returns.
So by investing responsibly, you’re not just aligning your money with your values; you’re also building a portfolio designed to stand the test of time.
How to Get Started
Ask about ESG options
Your financial advisor or broker can show you investment funds that focus on environmental or ethical goals.
Start small
You don’t need thousands to begin. Even small monthly contributions can make a difference.
Check what’s inside
Look at the fund’s sustainability reports or “ESG ratings” to see which companies it invests in.
Avoid greenwashing
Some funds claim to be sustainable but don’t back it up. Check how they measure impact and whether they follow EU sustainability standards.
Think long term
ESG investing works best over time. Give your money room to grow and your impact time to build.
Be smart with your money. Get a personalised quote today!
Get a Savings & Investments Quote
Responsible investing is all about finding the right balance, growing your wealth while supporting a better future. It’s not just a short-term trend; it’s a new way of thinking about how our money shapes the world around us. By choosing funds that focus on people, the planet, and good governance, you demonstrate that financial success and positive impact can go hand in hand.
Ready to explore your options today and see how your investments can work smarter, for you and for the world. Get a free quote today and take the first step towards a stronger financial future.
Our next Beginner Investor Blog Series post will dive into Investing Through Your Pension: A Tax-Efficient Way to Grow Wealth. Stay tuned!
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