How does sustainable investment differ from traditional investment approaches?

Sustainable investment, also known as socially responsible investment (SRI) or ESG (environmental, social, and governance) investing, differs from traditional investment approaches in that it focuses on investing in companies or funds that align with certain environmental, social, or governance criteria.

While traditional investment approaches mainly prioritize financial returns, sustainable investing also takes into account a company's impact on society and the environment. This means that sustainable investors may avoid investing in companies involved in activities that are harmful to people or the planet, or actively seek out companies that have a positive impact in these areas. Additionally, sustainable investment may involve engaging with companies to encourage more responsible practices or supporting shareholder resolutions related to sustainability issues.