Do you know where the money you invest goes? JM, reader of sheetnot only knows how to make a point of choosing the investment because of the impact it has on society.
He applies, in practice, one of the ESG criteria, when he consciously decides to remain in savings despite the uncompetitive profitability in the current interest rate scenario, a subject I discussed in “Savings and the new Selic”.
The ESG (environmental, social and governance, or ESG) criteria incorporate a view that goes beyond profitability when deciding on investment in a particular company, project or financial instrument, contributing to sustainable economic growth.
An ESG investment incorporates some issue, whether environmental, social or governance, into its investment analysis and takes long-term sustainability into account.
These investments also receive other denominations, such as responsible investing, sustainable investing, social impact investing, ethical investing, green bonds (known abroad as green bonds), investments in the infrastructure area, among others.
One of the strategies most used by investors around the world is the negative filter, defining criteria to exclude certain assets from their investment portfolio. The sectors that are among the most avoided by investors, due to their high social and environmental risk, are: weapons, tobacco, nuclear energy, pornography, gambling and alcoholic beverages.
The positive filter, in turn, instead of excluding assets, works with the inclusion of those that meet the established criteria and standards. It could be a specific investment, usually related to sustainability, such as reducing carbon emissions, or policies of inclusion and diversity at work, which can attract more customers (and more sales) than other companies in the same industry.
Returning to the example of JM, for him, the great attraction of savings is its social function: the financing of home ownership for many disadvantaged people.
What happens to the money deposited in savings? How much of savings deposits are allocated to real estate credit?
The funds raised in savings deposits by the entities that make up the Brazilian Savings and Loan System (SBPE) represent a relevant source of funds for real estate credit operations.
According to current legislation, at least 65% of the funds deposited in savings accounts must be invested in real estate financing operations. Another 20% must be collected at the Central Bank to fulfill the compulsory savings deposit. The rest of the resources (15%) can be used freely by financial institutions.
Thus, R$ 65.00 of every R$ 100.00 deposited in savings will be allocated to real estate financing, helping to reduce the housing deficit and fulfilling the dream of owning a home for many Brazilians.
I close with the sentence of the reader that inspired today’s column: “So, in addition to the meager personal income, I feel something more useful (or less useless) in this unequal Brazil, where the lack of a roof for so many people is a problem for the whole society”.
He invests with purpose, giving up better returns for a cause.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
