The focus of a lot of so-called activism today is on trying to get you to spend your money.
There are plenty of reasons to be interested in SRI, which has existed in some form for decades.
These days, its a bit more complicated.
But can money ever be moral, even if its invested in theoretically good and honest companies?
The point of which is still to give you a return larger than your initial contribution?
But in my view it depends on what you want your investment to accomplish.
And investor behavior can have some impact on how businesses function, all cynicism aside.
Naturally, financial firms are well aware of the interest in SRI.
Heres what to know.
These investments are typically screened according to environmental, social, and governance standards (ESG).
For example, it might measure waste, pollution, etc.
SocialHow a company relates to employees, suppliers, etc.
What are its working conditions?
What standards does its supplier follow?
Does it care about its community?
GovernanceHow a companys leadership is formed and behaves.
What is executive compensation?
What are its shareholders rights?
What politicians does it contribute to?
And what funds you invest in depends on whats most important to you.
And consult a financial professional.
There are some benefits beyond a clear conscious.
Limitations of Socially Responsible Investing
Even the most socially-responsible companies are still, well, companies.
No company is ever going to be perfect.
Luck plays a role, as does timing.
According to a 2017 article fromCharles Schwab, that may no longer be the case.
Do we have a responsibility to be socially conscious with our investments?
Thats for you to decide.
