Danny ChenAs a climate stakeholder, isn’t investing in ESG ETFs enough? Why should we need financial planning?
Money is useless if you cannot achieve your goals with them. To answer this question, 2 topics that we need to look into:
#1 Investment Is Not Revenue
#2 The Benefits of Planning
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𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗶𝘀 𝗻𝗼𝘁 𝗿𝗲𝘃𝗲𝗻𝘂𝗲
Under the capital market mechanism, without customers there will be no businesses, regardless which industry the business is from.If everyone does not purchase or promote these ESG-related companies, how will they break even and profit?
Relying on government procurement and regulation with philanthropy support will not yield superior investment returns even with lower loan rates from green banking policies. The market demand is from the users, so if you want to profit from the net-zero transition, be the change you want to see in the world and invite others to join the climate movement.
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𝗧𝗵𝗲 𝗕𝗲𝗻𝗲𝗳𝗶𝘁𝘀 𝗼𝗳 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴
For most people, often, the financial goals are retirement lifestyle support, self-owned real estate, and children education, etc. When it comes to climate goals, the goals are not forest fires, ocean plastic pollution, or air pollution. The goal is to support our future lifestyle dependencies with food security, clean water, and sufficient energy.
To ensure we have food security, clean water, and sufficient energy with the highest success rate, planning is always the best start. Planning allows people to review their current financial status, clarify their future climate and financial goals, and build up a feasible plan to achieve the goals with acceptable risks.
On top of that, it encourages
1. Sufficient preparation in advance
2. Efficient resource allocation(time, money, attention)
3. Behaviors alignment with future goal focus
4. Comparable multiple options reviews
5. Feasible implementation timeline
6. Risk mitigation and management
7. Progress track with Adjustment
8. Foster Stakeholder Communication
Financial planning is about risk management. All planning designs lead to higher goal success rates if the information is fully disclosed and the implementation follows the plan. This is the main difference between investment and financial planning: Investment focuses on the financial return excitement, while financial planning emphasizes goal achievement. Similar concepts apply to our climate action.
Focus on the goals instead of the hype and the lows. Long-term results do not come from short-term thinking. When you have multiple future goals with limited resources(time, money, and attention), planning will maximize your success rate and allow you to achieve your goals with acceptable risks.
