Sustainable Trading

In recent years, tackling climate change has become one of the most important issues for many people and organisations around the world. Businesses recognise the need to adopt more sustainable practices and their benefits to their bottom lines. Fortunately, the best UK trading platforms and the trading industry are no different and are slowly but surely coming around to the idea of sustainable trading. 

Sustainable trading is the intentional effort of all industry players to practice their trading activities in a way that generates economic value and social and environmental benefits. Reversing the effects of climate change is critical to the preservation of the environment and the well-being of future generations. This piece will look at a few steps to sustainable trading and what it means. 

What is Sustainable Trading?

Sustainable trading uses environmentally, socially, and economically viable practices in all aspects of trading. It involves traders, brokers, investors, and authorities governing trading activity, actively reducing wastage while promoting the responsible use and reuse of resources. 

Trading is one of the major economic drives and significantly influences how we treat the environment. For instance, when you trade on carbon-positive companies without demanding change or putting profit over the well-being of the environment. You’re inadvertently hurting the environment and going against the spirit of reversing the effects of climate change. 

But when you strategically pick your investments and only trade in companies implementing a green strategy, you support sustainability and signal the market to make a change. 

However, the buck does not just stop with investors. Brokers and authorities are also responsible for pressing the issue on the organisation they’re working with and making sustainability a pillar of the trading markets. 

Steps to Sustainable Trading

1. Ingrain Sustainability

As the investment and trading community, sustainability should be ingrained in all aspects of our investment strategy and processes. For instance, when evaluating a company’s value, we should also consider its environmental footprint and impact. The more a company harms the environment, the lower the valuation it should get. This would get the attention of even the most resistant organisations and get them to make changes. 

Brokerages and exchanges also consume a lot of resources in their day-to-day running. The more they can prioritise responsibly produced office supplies, the better. They can also consider using green energy by installing solar panels on their roofs to reduce their reliance on unsustainably produced energy. 

On a more personal note, the more you prioritise investing in sustainable companies, the more sustainable trading will be. 

2. Support Sustainability Initiatives

This might be the easiest and most convenient of all the steps to sustainable trading. If you’re an investor, trader, or in the sector, supporting sustainability initiatives could be as easy as writing a cheque to an environmental organisation. It could even be as simple as dedicating your time to planting trees or cleaning the beach. 

There is also the emergence of green bonds that help fund environmental projects. You can include some of these bonds in your investment portfolio, which will benefit you and the environment.

3. Adopt Sustainable Policies and Regulations

Environmental policies and regulations are constantly changing to reflect national, international, and organisational environmental needs. However, much is left to be desired when it comes to implementing and enforcing them. Many companies greenwash their brands to appeal more to environmentally-conscious consumers, and the trading industry is also guilty of this in some aspects. 

Trading regulators should implement strict sustainability policies and ensure the industry adheres to them. In addition, players in the industry should take the initiative to implement more sustainable practices even without being forced to and make it part of their culture. 

4. Get Serious About Sustainability Reporting

We should emphasise how the trading industry reports non-financial matters. This would encourage players to be more honest about how they’re performing with their sustainability goals. The impact would be reducing instances of greenwashing and forcing the industry to look at sustainability and implement the needed changes earnestly. Proper reporting by the media would also give investors a clear picture of what is going on and how much progress is being or still needs to be made. 

Furthermore, when the reporting is accurate, the trading industry and players in the sector would have no option but to shape up.