Focusing on the ESG aspect, green investment has developed significantly around the exchanges worldwide due to delivering a long-term effect on the economy.
Heaptalk, Jakarta — Indonesia’s government continues to encourage society to strengthen green investment activity in the country. As it is known, the archipelago contains huge potential related to this sector, spanning renewable energy and electric vehicle development. As projected by the Bank of Indonesia, the investment value around this industry will attain more than US$600 billion.
People must enrich their insight to comprehend the contribution of green investment towards the country’s environment, particularly the climate change issues. As it is known, green investment is not solely to obtain the benefits financially, yet this investment instrument has a socially responsible for the green principle.
Green investment is an investment activity that prioritizes Environmental, Social, and Governance (ESG) aspects. This principle focuses on the sustainable impact on the ecosystem, overriding the economic goals. This investment instrument has developed significantly around the exchanges worldwide due to delivering a long-term effect on the economy.
However, in principle, green investment is an investment activity that aims to preserve nature and the environment and discover alternative sources of new and renewable energy. Furthermore, this investment type is also considered as the impact investment. Besides providing financial returns devoted to the investors, this investment scheme also positively impacts the social and environmental aspects.
Green Investment benefits
Based on Tanamduit investment company, performing green investment possess several strategic advantages, particularly for the nation’s environment and society.
1. Environmentally friendly project support
This investment instrument’s presence would become an outstanding opportunity for investors to bolster environmentally friendly projects. The projects can include natural resource conservation, developing alternative energy sources, or other business activities prioritizing green and environmental aspects.
2. Climate change reduction
Many investment asset platforms have supported climate change prevention. Through this objective, investors could bolster establishing infrastructure to prevent the climate change problem through the investment instrument. For this reason, the green-based principle development project would not victimize environmental damage.
3. Easy and safe transactions
Investors can conduct environmentally friendly investment activity in diverse asset instruments more conveniently and securely. As it is known, several investment asset platforms have supported mutual funds investment and the ESG-based retail sovereign Sukuk.
4. Transparent investment product performance
Generally, environmental-based investment instruments have an advantage in the transparency of their product performance. For instance, the Financial Times Stock Exchange (FTSE) Russell Indonesia’s ESG contains the stock collections that have passed the ESG Rating process, with over 300 indicators systematically. The rating process is conducted transparently and objectively.
5. Provide optimum benefits
Green investment has become an alternative way to gain passive income for investors. Multiple investment instruments, including mutual funds and environmental bonds, these instruments would grant optimum advantages from medium-term to long-term durations. Investors interested in optimizing their short-term earnings to the medium-term can determine whether to utilize money market funds or State Securities. However, they can designate mixed mutual funds to perform long-term investments.
