Interest in sustainable investments is growing strongly. According to a recent “Sustainable Signals” report by the Morgan Stanley Institute for Sustainable Investing and Morgan Stanley Wealth Management, more than 77% of individual investors globally show a growing interest in companies and funds that not only aim for competitive financial returns, but also for positive social and environmental impact. This trend is also reflected in the willingness of more than half (54%) of investors to increase their allocations to sustainable investments in the coming year.

This increased interest in sustainability is attributed to various factors, including new scientific findings on climate change (53%) and the financial performance of sustainable investments (52%). Companies with sound ESG (environmental, social and governance) practices are increasingly perceived as generating higher returns, with 70% of investors supporting this belief. However, despite the growing interest, there are concerns about the transparency of ESG data and the risk of greenwashing, i.e. the portrayal of investments as more sustainable than they actually are.

Diversifying the portfolio with green investments

Diversifying the investment portfolio is a crucial strategy for managing risk and optimising returns. This practice involves spreading investments across different asset classes, sectors and geographic areas to reduce exposure to any negative market fluctuations. In recent years, diversification is no longer limited to traditional financial assets such as shares and bonds, but also extends to sustainable and innovative investments.

More than half of individual investors said they plan to increase their allocations to sustainable investments in the coming year, reflecting a growing trend towards sustainability. This shift not only responds to growing environmental awareness, but also to the perception that sound ESG practices can contribute to superior financial returns. Investing in green assets can offer growth opportunities in emerging and sustainable sectors, which may have higher long-term growth potential than traditional sectors.

Green investments: the statistics you need to know

The Global Sustainable Investment Review 2022 report, published by the Global Sustainable Investment Alliance (GSIA) and sponsored by HSBC Global Research, reveals that total assets invested in sustainable assets reached USD 30.3 trillion globally. This marks a significant increase from the past and indicates a growing maturity of the sector. In markets outside the US, such as Canada, Europe, Japan, Australia and New Zealand, sustainable assets have increased by 20% since 2020.

However, in the US, the value of sustainable assets decreased from USD 17 trillion in 2020 to USD 8.4 trillion in 2022. This decline is due to a tightening of the criteria for defining sustainable investments and an increased focus on combating greenwashing. In Europe, there is an annual decrease of 5% in the share of assets defined as sustainable, reflecting the increasing stringency of disclosure and definition regulations.

In Italy, environmental, social and governance (ESG) risks are considered fundamental for economic growth and financial stability. Since 2019, the Bank of Italy has integrated ESG criteria into the management of non-policy portfolios. The Bank's Sustainable Investment Charter sets out three lines of action: promoting transparency on sustainability, integrating ESG principles into investment management and publishing analyses on climate and sustainable risks. The Annual Sustainable Investment Report reflects these practices, following the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the Network for Greening the Financial System (NGFS).

The report emphasises the importance of developing clearer and agreed definitions for sustainable investments and recommends greater harmonisation of regulations globally. Proposals include the creation of a task force to align sustainable finance regulations and the global adoption of the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD). These efforts aim to ensure greater transparency and data quality, which are essential for the transition to a sustainable future.

Heiwit's green asset

Green investments, such as those related to renewable energy and green technologies, are gaining ground among investors. These assets not only contribute to environmental sustainability, but often also offer significant economic benefits. Among the most promising options to diversify your portfolio with a green asset, Renewable energy tokens, such as HEIWITs, are emerging as an innovative and beneficial choice.

HEIWITs are tokens representing a share of power installed on renewable energy plants. Each token corresponds to a power output of 100W and has a unique code that identifies a specific part of a green energy plant. Ownership of a HEIWIT allows one to receive a proportionate share of the economic benefits from the power production of the plant to which it belongs.

A HEIWIT is issued when a new renewable energy plant goes into operation and remains operational for about 30 years. The cost of the token includes the construction, commissioning, routine maintenance and operational management of the plant, but excludes extraordinary expenses for repairs, relocation and insurance. The proceeds from the sale of the energy produced are distributed proportionally among the token holders.

HEIWITs offer numerous advantages in the transition to a more sustainable energy future:

• facilitate participation in the ecological transition, contributing to the reduction of the carbon footprint and supporting clean energy production.
• Owning HEIWIT can generate revenue through the sale of energy, thus offering an economic return that can help offset rising energy costs.
• Priced at around 100€, they are designed to be accessible to a wide audience, making the investment in renewable energy more affordable than the installation of domestic photovoltaic systems.
• They promote economic decentralisation in energy production, reducing dependence on government incentives and offering a self-sufficient solution.
• Investing in HEIWIT also helps to offset CO2 emissions, contributing to reduced emissions and improved air quality.

Conclusions

Incorporating green assets such as HEIWITs into one's investment portfolio is a smart strategy to diversify and reap economic and environmental benefits. With increasing interest in sustainable investments and growing awareness of sustainability, adding an innovative, green asset to your investment mix can not only improve portfolio returns, but also contribute significantly to the transition to a more sustainable energy future.

With the opportunity to invest in renewable energy at an affordable price and benefit from the proceeds of green production, HEIWITs offer a unique opportunity for anyone wishing to combine financial and environmental goals. It has never been easier or more profitable to do one's part for a more sustainable future, simply by investing in renewable energy.

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