Sustainable Investment

What Are Sustainable Investments?

Sustainable investments are financial assets that aim for attractive returns while also considering environmental and social criteria. They expand on traditional investment factors such as security, profitability, and liquidity. Investors seeking to invest sustainably can choose products that support climate-friendly technologies or address social sectors like education and healthcare. Another common approach is to intentionally exclude certain industries, such as nuclear energy and weapons, from investment portfolios.

What Sustainable Investment Options Are Available?

More and more banks and financial providers now offer options for saving or investing sustainably. These include sustainable savings or fixed-term deposit accounts, as well as green funds or ETFs. Investors committed to sustainable strategies may also consider direct investments in solar energy, wind farms, or environmentally responsible startups—though these options often involve higher risk.

Sustainable Savings Accounts

A savings account is a low-risk way to invest money flexibly at a variable interest rate. With sustainable savings accounts, banks use deposits exclusively for ecological or socially responsible purposes.

With WeltSparen's sustainable savings account, savers benefit from flexible access to their money while supporting environmental and socially responsible causes. At the same time, deposits are protected by the EU-wide deposit guarantee of up to €100,000 per person and bank.

Sustainable Fixed-Term Deposits

Fixed-term deposits allow you to invest money for a set period at a fixed interest rate. In the case of sustainable fixed-term deposits, banks invest funds solely in responsible projects that positively impact the environment or society—such as renewable energy, social housing, or fair trade initiatives.

With WeltSparen's sustainable fixed-term deposit, savers receive predictable interest while supporting ecological and social initiatives. Like savings accounts, these deposits are also protected by the EU-wide deposit guarantee.

Invest fixed-term deposits sustainably

Sustainable Funds and ETFs

ETFs (Exchange Traded Funds) are index funds traded on the stock exchange. They replicate the performance of an index, such as the German DAX. These indices typically include large companies whose price movements are mirrored by conventional ETFs. Unlike ETFs, mutual funds are actively managed by a fund manager who aims to outperform the benchmark index. The same principle applies to sustainability funds, with the key difference being that the included companies operate in a sustainable and forward-looking manner. The risk in funds is typically more spread out due to diversification compared to individual sustainable stocks. However, active management of sustainability funds usually comes with higher fees than passively managed sustainable ETFs.

Sustainable ETFs replicate indices that have been preselected based on ethical criteria. These indices include companies and industries committed to a greener future and aligned with ESG standards. Like conventional ETFs, most sustainable ETFs are diversified, meaning the risk is distributed across multiple companies and sectors. Common sustainable indices include:

Sustainable Stocks

Investors can buy shares in companies that operate in an environmentally and socially responsible manner. By purchasing individual stocks, investors can directly support companies that align best with their personal values of sustainability. However, this form of investment is generally less diversified than options like ETFs, which can result in higher risk.

Criteria for Sustainable Saving and Investing

There is no universal definition for sustainability in investing. However, several criteria can be used to identify and classify sustainable savings and investment options. These standards aim to improve transparency around what qualifies as a sustainable investment.

The most important criteria include environmental impact, social responsibility, and corporate governance—summarized under the term ESG (Environmental, Social, Governance). ESG investments typically involve products that support environmental and social causes and ideally invest in future-oriented companies that treat their employees fairly. Additionally, the EU taxonomy defines which environmental activities should be considered sustainable, helping to increase transparency and comparability of sustainable investments. Other key methods and criteria also support sustainable investing.

Individuals who want to save or invest sustainably can also consider whether the investment product avoids greenwashing—that is, the practice of portraying products or companies as more sustainable than they truly are.

Basics of Sustainable Investing

The field of sustainable investing is diverse and complex, and can be challenging due to the lack of a single definition for sustainability. A checklist can help guide investors in identifying sustainable products more easily:

Which Companies Are Excluded from Sustainable Investments?

Sustainable investing may involve the explicit exclusion of certain companies or industries. These typically include businesses involved in the following areas:

Opportunities and Risks of Sustainable Investments

Green investments can offer a variety of opportunities that provide both financial and societal benefits. Investments in sectors like renewable energy or sustainable technology have the potential to generate attractive returns. Companies and projects that demonstrate responsible resource use and ethical business practices are often well-positioned to deliver stable, future-proof earnings. Moreover, sustainable saving and investing allows individuals to align their financial goals with personal values, creating a positive societal impact. This alignment can be a strong motivation for many investors, as their capital contributes to addressing global challenges such as climate change and social inequality.

Despite these opportunities, green investments are not without risks. Like all capital market investments, green ETFs and other sustainable financial products are subject to market volatility. This risk can be particularly high in specialized and rapidly growing sectors. Additionally, regulatory changes, technological developments, and the evolving nature of young companies may affect performance.

To mitigate the risks associated with sustainable investments, broad portfolio diversification can be beneficial. One effective strategy is to combine low-risk savings products—such as savings and fixed-term accounts—with a sustainable investment portfolio. This approach helps spread risk and increases the overall portfolio’s stability.

Save and Invest Sustainably with WeltSparen

WeltSparen offers a wide range of options to save and invest your money sustainably while earning attractive interest. With products like sustainability-focused savings accounts, fixed-term deposits, and ESG-compliant ETFs, you can diversify your portfolio and invest your funds responsibly and ethically.

Save & invest money sustainably

Note: Every investment in the capital market involves opportunities and risks. The value of investments may rise or fall. In the worst-case scenario, a total loss of the invested amount may occur. You can find detailed information under Risk Notices.