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What are the risks associated with sustainable investment?

Curious about sustainable investment

What are the risks associated with sustainable investment?

Sustainable investments come with certain risks, like any other investments. These risks include:

1. Market risk: The risk that the value of an investment will decrease due to market factors, such as a downturn in the economy or a decline in the overall stock market.

2. Liquidity risk: The risk that an investor will not be able to sell their investment quickly or at a fair price, due to a lack of buyers or market conditions.

3. Regulatory risk: The risk that regulatory changes or government policies will have a negative impact on the investment.

4. Operational risk: The risk of loss resulting from inadequate or failed internal processes, systems, or human errors.

5. Reputation risk: The risk that a company or investment will suffer negative publicity or a loss of public trust due to its environmental, social, or governance practices.

6. Concentration risk: The risk that a portfolio or investment is too heavily concentrated in a single asset or sector, making it vulnerable to downturns in that area.

7. Performance risk: The risk that the investment will not perform as well as expected, leading to lower returns or losses.

It's important for investors to be aware of these risks and to conduct thorough research before making any investment decisions, including those related to sustainable investment.

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