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An Introduction to Socially Responsible Investing
If you're looking to put the green in your green, socially responsible investing (SRI) is an investment strategy that integrates social or environmental criteria into financial analysis and making social investments has become increasingly easy, with a large amount of options for those looking to make a difference with their finances yet still turn a profit in today's financial markets.
Socially responsible investing is a growing market in which investment decisions are based on environmentally and socially conscious decisions. Socially responsible investors aren't just out to make a quick buck, they instead put their money into companies and funds that maintain socially and environmentally friendly practices. SRI is frequently described as the attempt to "do good while doing well."
Generally, social responsible investments and investors avoid putting money into anything related to alcohol, tobacco, firearms, gambling and defense or companies that supply products or maintain practices that do harm to the environment or do not contribute to social betterment. This includes companies that test on animals, are not diverse, have questionable human rights and worker rights policies.
This form of investing integrates personal and societal values into your financial decision making and has grown over the years, with more than $2 trillion in socially responsible investments and environmentally friendly investing now flowing in the worldwide markets.
Why Socially Responsible Investing?
Building a better tomorrow of trying to solve the environmental and social problems of today is the main goal behind socially responsible investing. Contrary to some reports, socially responsible investments have not only grown in variety, but have often outperformed traditional investments and funds because they are less susceptible to traditional market challenges and pitfalls.
The market for socially responsible investment options has grown, and now includes:
- Social responsible investment funds
- Socially responsible investing stocks
- Socially responsible mutual funds
- Green funds
Socially Responsible Investing Strategies
Though they vary, there are generally a few strategies practiced by socially responsible investors:
Screening: Screens companies to ensure they align with the investors social and environmental goals.
Divesting: Analyzing a portfolio or investment and removing money from companies and funds that do not support your social investment goals.
Shareholder Advocacy: seeks to influence companies from within by becoming shareholders and beginning a dialogue with management or proposing changes to company policies.
Positive Investing: Investing in companies that contribute to your social investment goals. This includes finding companies that develop products or services solely to better the environment or solve societal problems.
Whatever your personal goals, socially responsible investing has become increasingly easy given the growth and market performance of a growing number of funds. Like any investment or financial decision, do your homework and make sure you have a clear strategy prior to investing.
We thank you for visiting our directory, and wish you well in whatever endeavor brought you here. We are constantly adding new information and resources to our site, both general and state specific in nature, so check back often.
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