Investing In Your Values
What do you think of when you hear the term Socially Responsible Investing (SRI)? Ask ten different people and you may get ten different answers because it is about a value system. Socially Responsible Investing comes in a variety of different forms. There are several options available allowing everyone to invest in companies that share their personal values. By the end of this article you will know the different forms of SRIs available and how easy and satisfying it can be to invest in your values.
Investing In a Cleaner Better World
What makes a socially responsible investment? This is one that is believed to make the world a better place to live. These types of investments take on two fundamental characteristics: social and product.
One way to invest is to support companies that comply with certain socially conscious criteria such as human rights, labor practices, board diversity and environmental concerns as recommended by Sustainability Researchers.
On the other end, people can choose to invest in companies whose function is to deliver a clean, renewable or sustainable product or that create such products such as solar panels or clean water.
So if your passion is greener business models, fair labor practices or solar energy, there are a variety of investment products that can fit that need. Here are some ways to begin investing in SRIs:
Mutual Funds
The most common method of SRI investing is with mutual funds. Calvert Investments has a variety of funds that focus on environmental issues such as clean water and solar power. They also offer a variety of funds that focus on social issues and invest only in companies that enforce socially responsible business practices such as human rights and product safety among many others.
Professionally Managed Accounts
A professionally managed account is actively managed day-to-day by a Professional Money Manager. Curian Capital provides investors with an opportunity to invest in companies that screen for social criteria such as tobacco, firearms, human rights to name just a few. You can even choose to exclude specific companies from your portfolio. What you have then is a custom made actively-managed account created to suit your chosen needs and values.
Investment Goals and Personal Values All In One
Does this mean you need to move all of your money and investments into SRIs? Not at all. You can match your own personal values to your long term investment strategy. Investors can ease into the SRI with the help of a licensed Financial Professional; one who will create a portfolio that incorporates SRI in a way that maintains the overall risk tolerance of the portfolio, long term strategy, and asset allocation. Research shows that there is no conclusive data that non-SRI investments perform better as a whole. Let’s face reality, the goal of investing is to make money, and a properly diversified portfolio can certainly make some room to incorporate SRI that can generate wealth.
There is an SRI platform for every investor
There are a variety of investment vehicles and investment opportunities to make some of your portfolio green and begin the journey into the SRI universe. This means SRIs are an option for everyone. You can start easily and very affordably, in some cases for as little as $100. There is also an option to open a college savings plan (529 plans) within a SRI mutual fund.
SRIs mean something different to everyone. The heart of SRI is matching your own personal values to your investment strategy. Whether you want to invest in social causes or to particular green activities, there exists ways to do both and in a way that suits everyone. When we match our investments to our values in the proper way, we can not only make the world a better place but feel good about doing it.
Abel G. Talamantez is a Financial Planner and San Francisco Bay Area consultant specializing in Socially Responsible Investments. He welcomes your questions and comments at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
.
