Investing in sustainable funds to combat climate change has risen by 34 percent since 2016, according to a report by The Global Sustainable Investment Alliance. Experts say sustainable investing will continue to grow in the coming years, though attitudes about the risk associated with investing in these types of funds remain stagnant.
Wharton Marketing Professor Cait Lamberton sheds light on how sustainable investing is different than traditional institutional investing, and why sustainable investing is sometimes considered a “risky” investment, despite the reality of climate change.
“[A problem] I think these funds need to deal with and perhaps get in front of is skepticism among consumers. Consumers are smart, investors are smart, and this isn’t a time when hypocrisy is going to be tolerated well,” says Lamberton.
“On one hand, this feels risky, but on the other hand, it may be the safest bet we have because one thing we know is that climate change is happening. It’s not really a question. You can have different philosophies about where or why, but it is in fact happening,” she says. “And so a business trying to address climate change is not such a risky investment. It’s kind of a sure thing.”
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