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Interest in sustainable investing is higher than ever, yet confusion about what it is remains. Does a clear conscience come at the cost of poorer returns? Are sustainable investors mostly Millennials? We highlight 5 key points everyone should know about one of today鈥檚 most topical - and exciting - investing sectors.

1.听Sustainable investing has historically delivered comparable to conventional investments

Sustainable investing is about considering environmental, social and corporate governance (ESG) criteria when evaluating investments. Many investors now recognize that these factors can materially affect financial performance depending on sector and business model, and evaluating them helps provide a more holistic picture of risks and opportunities. This should support comparable performance to conventional investments 鈥� indeed, the MSCI KLD 400 Index, one of the longest-standing "sustainable" indices providing exposure to US companies, has generated similar returns and volatility to the S&P500 over the past 29 years¹. Keep in mind that past performance does not guarantee future performance.

2.听Sustainable investing is becoming mainstream

Interest in sustainable investing - from both individual and institutional investors - has grown significantly in recent years thanks to increasing recognition of the link between sustainability issues and financial performance. According to Google Trends, worldwide searches for the term have risen 75% since 2014, and the 2018 Global Sustainable Investment Review estimates that sustainable investing assets totaled nearly USD$31 trillion at the start of 2018 鈥� a 34% increase from 2016 levels. An October 2017 report by McKinsey even describes sustainable investing as 鈥榯he new normal'².

3. Investors have many options for investing sustainably across asset classes

Historically, sustainable investing options largely focused on avoiding unwanted exposures in public equities. Today, investors have a multitude of options that extend beyond just exclusionary strategies and include ESG integration approaches as well as intentional impact investing. The universe of these sustainable investments 鈥� which span bonds, equities and alternative investments including private equity, private credit, real estate and infrastructure - supports the construction of well diversified, cross-asset portfolios. At the start of 2018, the majority (51%) of sustainable investing solutions focused on public equities³ while approximately 36% focused on fixed income.

4. More data can help measure the sustainability of investments

The increased availability of environmental and social data from companies themselves as well as third parties, enables better evaluation of performance on sustainability metrics. This allows investors to assess which investments comply with various ESG dimensions, to track their progress over time, and increasingly to prioritize the issues that each individual cares about.

5.听Sustainability challenges may represent large scale investment opportunities

The sustainability challenges facing the world today can be daunting, ranging from climate change threats to natural resources strains to insufficient availability and affordability of quality healthcare. The United Nations' Sustainable Development Goals have been embraced by investors as a common framework to identify the most urgent social and environmental issues. Estimates of the capital needed to address these challenges run into the trillions of dollars annually, suggesting significant potential commercial opportunity for solutions that can successfully tackle these issues.

¹ Data from 30 April 1990 to 31 October 2019. Investing involves risks, including the potential of losing money or the decline in value of the investment. KLD (Kinder, Lyndenberg, Domini & Co) Research & Analytics. The MSCI KLD 400 Social Index is a capitalization weighted index of 400 US securities that provides exposure to companies with outstanding Environmental, Social and Governance (ESG) ratings and excludes companies whose products have negative social or environmental impacts. Individuals cannot invest directly in an index.

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Sustainable investing strategies aim to incorporate environmental, social and governance (ESG) considerations into investment process and portfolio construction. Strategies across geographies and styles approach ESG analysis and incorporate the findings in a variety of ways. The returns on portfolios consisting primarily of sustainable investments may be lower or higher than portfolios where ESG factors, exclusions, or other sustainability issues are not considered, and the investment opportunities available to such portfolios may also differ.

Any information presented is general in nature and not intended to provide individually tailored investment advice.听The information and opinions expressed in this document were obtained from sources believed to be reliable and in good faith, but no representation or warranty, express or implied, is made as to its accuracy or completeness. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of 蜜豆视频 Financial Services Inc. As a firm providing wealth management services to clients, 蜜豆视频 offers both investment advisory and brokerage services. These services are separate and distinct, differ in material ways and are governed by different laws and separate contracts. For more information on the distinctions between our brokerage and investment advisory services, please speak with your Financial Advisor or visit our website at ubs.com/workingwithus. 蜜豆视频 Financial Services Inc. is a subsidiary of 蜜豆视频 AG. Member FINRA/SIPC.