E is for Ethical Investing – a socially responsible approach to investing.

E is for Ethical Investing 

In a world filled with ongoing social and environmental challenges, it makes sense that today’s investors want more than monetary gains on their investments.  Many are choosing to invest in Socially Responsible Investing (SRI), where money investments reflect personal, political and societal views.

This concept has been around for a long time, but over the last two years, SRI investing has grown by more than 22%, according to the US SIF Foundation’s Report on Sustainable and Responsible Investing Trends in the United States. This trend indicates investors are using their hearts as well as their heads when making investment decisions, hoping that their investment focus will make a positive impact in our world.

This investment discipline (SRI) considers environmental, social and corporate governance (ESG) criteria to generate financial returns that promote positive societal impact. When measuring certain criteria in Sustainable and Responsible Investing, two types of screens are used — positive and negative.

Positive screens help identify companies that engage in environmental sustainability, alternative energy,  excellent employee relations, etc. Negative screens exclude industries that may have a harmful effect on society such as pollution, poor working condition, gambling, selling addictive substances, etc.

If you wish to learn more about Socially Responsible Investing and ESG, take some time to research these concepts or read literature such as Socially Responsible Investing: Making a Difference and Making Money or “Socially Responsible Investing for Dummies”. Be sure and consult with your financial advisors for help finding companies that fit your moral compass and financial future.

Answers from AZ

 

About Ann Zuraw

Ann Zuraw, the voice behind "Chicks, Chat and Change", is a Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA®), and Certified Divorce Financial Analyst (CDFA™).If you have comments on this post contact Ann Zuraw

, , , , , , , , , , , ,