What is sustainable investing?

Sustainable investing is a strategy that integrates environmental, social, and governance (ESG) criteria into the investment decision-making process. The key aspect of this approach is that it does not focus purely on financial returns; rather, it seeks to balance financial performance with positive societal impact and ecological sustainability.

This means that investors who engage in sustainable investing consider not only how investments will perform financially, but also how those investments affect the world at large. By incorporating environmental concerns, such as climate change or resource management; social factors, including labor practices or community impact; and governance issues like corporate ethics and management practices, investors aim to support companies that align with broader values and contribute to sustainable development.

In contrast, the other options do not fully encompass the definition of sustainable investing. Focusing solely on financial returns ignores the sustainability aspect entirely, while considering only environmental criteria overlooks the important social and governance factors. Investing merely based on companies with the lowest carbon footprint also fails to recognize the multifaceted nature of sustainability, which encompasses a wider range of issues beyond just carbon emissions. Thus, option C accurately represents the holistic approach of sustainable investing.