Novo Wealth in their recent website article for clients noted the rising popularity of responsible investing is leading to an increase in brands and companies ‘greenwashing’.
The increase in consumer demand in ethical companies and brands is seeing a large investment swing to renewable energy, ethical supply chains, medical innovations etc that help society. This is seeing people divesting more than ever before from industries that cause harm including fossil fuels, gambling, and tobacco.
However, this paradigm shift has caused an increase in green marketing tactics that present misleading or false claims regarding environmental impact, socially responsible products, or sustainable practices. As a consequence, the world of responsible investments is becoming tainted by greenwashing, making it difficult for responsible investors to ethically invest.
Paul Garner, founder of Novo Wealth said, “Our clients ask how they can differentiate between genuine ethical investments and not-so-responsible “green claims” made by others.
Greenwashing by funds is the practice of making unsubstantiated or misleading claims about the sustainability or environmental benefits of their investment products. Unfortunately, just because a fund uses the term ethical, sustainable, green, or responsible in its description, or claims to be fossil fuel free, does not mean this is the case and those interested to learn more about this, and other examples should contact us.”
Novo Wealth note that there are a few key things an investor can look out for when researching funds to assess how socially responsible and environmentally conscious their offerings are.
Does the fund publicly disclose which companies they’re investing in, as many funds will provide a list of their investment holdings, but many will only supply the top ten holdings. It’s difficult to know how responsible the entire portfolio is. This is where working with a financial adviser like Novo Wealth is extremely beneficial, as funds will provide full details of holding to us, when requested.
Mr Garner also said, “It is important to see how a fund’s voting history on various environmental and ethical matters has been and what are they supporting. We look for those voting for or against issues such as climate change, human rights etc. We also look at how engaged they are with the companies we invest in to ensure that they sell investments that have policy changes that mirror greenwashing.”
Starting a responsible investment portfolio is much easier with the right help. As a dedicated ethical financial adviser, Novo Wealth can help you ignore the misleading environmental claims and greenwashing jargon and understand how responsible funds may work in conjunction with an overall financial plan.
About Novo Wealth
Novo Wealth are ethical investment advisers, based in Adelaide and working with Australians nation-wide. Whether looking at ethical investments for super funds or investment portfolios, there are many options available. Some people choose to have 100% of their investments and retirement plans in ethical investments. Other people choose a percentage that can be changed over time. People have concerns about future performance; however, Novo Wealth know ethical investments and ethical investment funds can provide returns comparable to other industry-standard investments.
The core of all their financial services focuses on secure, ethical investment and financial planning that caters to the desire to do good in the world and builds wealth.
Learn more about Novo Wealth by visiting their website here: https://novowealth.com.au
Paul Garner
Company: Novo Weath
Address: 19 Rundle St, Kent Town SA 5067 Phone: 00 0000 0000
Website: https://novowealth.com.au
Email: pgarner@novowealth.com.au
