Socially Responsible Investing

by Les Satlow | Feb 24, 2017

New England Investment and Retirement Group Socially Responsible Investing

New England Investment and Retirement Group finds that many investors today are looking at more than just month end statements to select investments. Many Investors feel compelled to focus on socially responsible investing, or ethical investing. In today’s climate socially responsible investing has changed from when it meant not buying shares in companies that profited within controversial industries. Now it includes investors who are also concerned with a company’s climate, culture, political and environmental associations. The movement to invest while being socially responsible is good for your conscious but is it good for your portfolio?

What is socially responsible investing?

Socially responsible investing is defined differently by every investor. The standard for the largest funds in this category are avoidance of the hot button industries that generate all or a majority of revenue from industries such as tobacco, alcohol, firearms, gambling, nuclear power or fossil fuels. There are other smaller funds that make a concerted attempt to avoid the same industries as the larger funds while also purposely only investing in companies that share certain ideals and beliefs, such as specific environmental initiatives, or socially responsible wages.

Why should I consider socially responsible investing?

Investor concerns are growing with increased reservations on issues such as political contributions and lobbying, environmental issues, and climate change. Investors are demanding more SRI products and are now considering not only the return but company’s impacts on people and the planet.

Currently consumers are looking harder across the entire market, whether it’s the food they consume, the clothing they wear or where they choose to spend their money. They are looking to invest in and buy from authentic companies that engage in social and environmental responsibility seriously. The old adage of doing well while doing good has never been truer. The theory is that the companies who are able to operate in this way are companies that may also have a reduced investment risk.

What is next for socially responsible investing?

Adding social responsibility to the same virtues we consider in our overall investment approach; giving it the same importance as investment styles such as Growth and Value, will help move SRI from being thought of as only advocacy and political actions. Socially responsible investing helps to bring to light companies that are well-managed, not in serious violation of laws and able to maintain positive relationships with suppliers, employees, clients, and communities as well the environment as a whole.

With many investors pushing to be at the forefront to move forward values of equality, sustainability, in our lives and our society, the social investment movement will continue to push for fundamental social change. To become part of the solution and not contribute the problem.