How to become a Socially Responsible Investor
With people becoming more and more socially responsible these days it has become very popular to choose investments that meet our personal values/beliefs...from the environment, social justice and even good corporate regulations/standards. Socially Responsible Investing has become a very complex topic.
Socially Responsible (or Sustainable) Investing: Terminology
There are many terms for what we refer to as Socially Responsible Investing. Essentially, they all refer to the same thing, learning how to choose investments based on your personal values and beliefs. Here are the more common terms you may run across:
- Community investing
- Ethical investing
- Green investing
- Impact investing
- Mission-related investing
- Responsible investing
- Socially responsible investing
- Sustainable investing
- Values-based investing
The History of SRI: Began as Activism
Did you know that Socially Responsbile Investing was born out of early activism? Here's a timeline which covers the key milestones.
• 18th century: Religious organizations opposed businesses that supported slavery & alcohol consumption
• The Quakers created the Friends Fiduciary Fund; has existed since 1898
• First public offering of a screened investment fund was in 1928
• 1960s: students opposing the Vietnam War called on universities to divest from military contractors
• 1980s: Focused on screening investments in South Africa with the goal of pressuring the South African government to end apartheid.
• 1993: De Klerk administration took steps to end apartheid in South Africa.
Growing Sophistication Around SRI Data & Tools
Although SRI is a very complex (and popular) topic we are seeing a lot of data and tools available to help investors make good choices. Here are a few that we when helping clients determine where they should/could invest:
- Environmental, Social, Governance (ESG) criteria & reporting standards
- Morningstar Ratings, Sustainalytics, MSCI, Sustainability, Accounting Standards Board
- Different Investment Approaches: Exclusionary, Inclusionary, Impact Investing
Learn more about Environmental, Social, Governance (ESG) criteria & reporting
Watch our recorded webinar, How to Become a Socially Responsible Investor