With corporate greed and lack of oversight, many companies pursue profits above all else to the detriment of the environment and social impact. Once on the fringes of Wealth Management, socially responsible investing (SRI) is more popular today than ever. This approach seeks to maximize investment returns while avoiding companies that have a negative impact on the environment or society as a whole. Companies such as tobacco companies, weapons manufacturers or known polluters would be shunned.
Socially responsible investing has evolved into Environmental, Social and Governance investing. As the name implies, it is an investment process which considers environmental, social, ethical and governance issues into account before allocating funds. All investors want to see their portfolios grow, but not at the expense of ethical practices, society or the environment. Popular sustainable industries have recently included solar, wind, waste management and water filtration. This investment planning is not just about finding ethical and socially responsible companies to invest in, but also to take an activist role by using their voting rights to affect change.
One particular example where ethical investing comes into play is in the area of Gene Therapy. This innovative, yet controversial area is enticing to invest in due to the possibility of curing previously incurable diseases. However, there are many ethical issues that arise out of the processes that are used, such as animal testing and the resulting changes that can occur in our DNA.
There are many different socially responsible investment vehicles that can be used with Wealth Management. Stocks and bonds are always readily available, but taking the time to apply all of the various SRI filters can be overwhelming and time consuming. Socially responsible mutual funds and exchange traded funds are more accessible ways to participate in SRI investment. For accredited investors, more customized SRI investments are available such as hedge funds, venture capital, and private equity funds.
However you choose to participate in socially responsible investments, you can feel good that you are holding corporations accountable for their environmental, societal and ethical actions.
For more information on Socially Responsible investing reach out to you today:
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