Environmental sustainability promotes the minimal and measured use of Earth’s natural resources so future generations can meet their needs. This includes conserving energy, water, and space, and using renewable resources in place of more limited ones, such as fossil fuels.
What is environmental sustainability?
With growing concerns about overconsumption, many investors want companies to lead the way to a more environmentally sustainable world. Companies that rely on limited resources not only further contribute to their diminishment but also face substantial risk to their own operations. The more companies use the limited resources, the higher the expenses will be to acquire them. Businesses that operate on limited resources also run the risk of reduced productivity due to scarcity. To reduce these risks, investors may support companies that shift toward renewable resources or minimize their consumption of limited resources.