How Has Trading Become More Eco-Friendly?
The stock market has not been historically known for its contributions to national or global initiatives. It has been a purely financial system, existing to enable the growth of business and wealth in concert. But trading and investments nonetheless have a real-terms impact on society – not in the least in terms of carbon cost.
The climate crisis has become more visible to the average citizen in recent years, with unpredictable weather patterns ramping up.
As such, individuals and organisations alike are taking steps to reduce their carbon footprint. Trading is not often thought of as a carbon-emitting practice, but its impact is real – and now, on the decline. But why?
One of the most immediate ways in which trading has become demonstrably more eco-friendly relates to
increased accessibility to the discipline. Previously, wealth management would be entirely conducted by brick-and-mortar enterprises, with customers and traders alike travelling frequently to secure deals and consult with advisers.
Today, though, the industry has shifted considerably with thanks to lightning leaps in financial technology. Stock markets, foreign exchanges and investment funds are all accessible digitally, minimising the carbon footprint for customers and staff of hedge funds and investment brokers.
Meanwhile, something of a retail revolution has been underway. Previously, budding investors could only do so through a broker or management company. Now, retail consumers can trade on their own terms, whether CFD, futures contracts or straight asset purchasing, with apps and programmes that empower them to handle
their portfolio directly.
There is another knock-on effect of increased equitable access to stocks and exchange markets though,
besides the relief of travel burdens on consumers. Trading apps have also had an impact on the kinds of
products available on the market, as retail habits influenced them more directly.
‘Green’ stocks and investment funds have become more prevalent, enabling investors to place their money in funds that directly benefit ecological and carbon-negative businesses. As such, market money is having an impact on the fight against carbon emissions.
Lastly, there has been a general push towards sustainability and eco-friendliness on the part of businesses and workplace environments across the country. The UK government’s Net Zero Strategy has born a number of incentives and initiatives, from subsidising green fleets to decarbonising programmes for domestic and commercial buildings alike.
Alongside a cross-industry increase in uptake of ESG strategy, this has resulted in trading and investment organisations reckoning more directly with the carbon cost of their office overheads. Greener energy sources and digitised processes are leading to fundamentally greener wealth management businesses.