Nowadays, every investor does thorough research before making an investment. After all, they want to make sure that their investment will yield profits for short, medium or long-term goals.
Of course, that would mean evaluating a company’s performance, products or services and many other financial indicators that may portray just how profitable it would be to invest in a company’s stocks, bonds or other commodities. What’s even more interesting is that investors also look at non-financial factors before making their decision.
The main reason is that these factors may also influence how a company may perform over a certain period of time, as well as indicate whether or not the company in question will be successful in the long run. With that in mind, here are some of the non-financial factors investors evaluate today.
One of the major non-financial factors investors focus on today is sustainability. In other words, investors look at the environmental impact of what the company is doing and how eco-friendly their actions are.
That said, by focusing on esg investing otherwise know as environmental, social and governance (ESG) aspects, investors can grantee that the company will be able to have a stable footing in the ever-changing market due to it’s noble agenda.
Business performance is another non-financial factor even though it may seem quite financial when you look at it. Of course, investors are not solely focusing on company’s profitability and their sales. Instead, they are also focusing on whether or not a company has clear goals and plans for the future.
In other words, will this company’s plan be viable in five to then years or will it be a short-term success with no potential for future growth and development. This allows investors to decide what type of investment to leverage for such companies and whether or not investing is even worth it, to begin with.
Everyone knows that reputation can make or break a company. Regardless of how great a company products or services may be, if they’re not favored by consumers, chances are they won’t be able to succeed, not for long anyway. That’s why many investors evaluate a company’s reputation before deciding whether or not to invest further.
This evaluation may include factors, such as how the company treats employees, customer and suppliers, whether the company has good practices, do they follow industry standards and legislation and so on. Therefore, reputation is arguably one of the most vital factors for determining the worthiness of investment these days.