Choosing Investments Based on Social Responsibility
For many people, the decision about what companies to invest in comes down to growth, profits and dividends. There’s nothing wrong with wanting to see a return on your investments, but have you considered looking into a company before deciding to invest? Maybe you’ve thought about the ethics, what the company is doing for their community or the social responsibility of the companies you invest in. That's great – this is socially responsible investing!
What is Socially Responsible Investing (SRI)?
This idea goes by many names like socially responsible, values-based, sustainable and ethical investing. This concept is about choosing companies to invest in that improve environmental and social causes using your investment.
As the world changes and you become more aware of social issues, you may decide to be more selective about the companies you choose to invest in.
While part of socially responsible investing is deciding which companies to invest in, there’s another part to the choice – deciding which companies to exclude from your portfolio. You may defer from investing in companies based on their ethics and objectives. You can choose not to invest in those companies if you’re concerned about their ethics, morals and the impact they have.
How to Choose Socially Responsible Investments
What someone deems as socially responsible is a matter of opinion. Some people may decide that investing in a car manufacturer that prioritizes creating electrical engines is a socially responsible investment. Other people may not see that as socially responsible and want to invest in a company that has a different impact. What you decide is socially responsible is about what values you align with.
Can a SRI strategy perform as well as a standard investing strategy?
While it’s always crucial to have a diverse portfolio, a socially conscious investment strategy can perform as well as a standard strategy.
If you’re interested in finding out more about socially conscious and responsible investing strategies, contact the office.
All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.
Socially Responsible Investing
July 31, 2021