As an investor, the first thing that anyone wants is a return, and hopefully a healthy one. With the growth in popularity of socially responsible investing (SRI) over the last decade, this raises the question: How does one choose an investment to not only get a return, but to also do some good?
SRI, also referred to as impact investing, ethical investing, or green investing, is used to generate long term monetary returns as well as a positive societal impact. As our planet is under the most stress that it has ever been–from climate change to pollution and poverty–SRI allows institutions and individuals a way to invest funds with an expectation for social and environmental advancements.
Investments in Line with Values
Impact investing provides a greater opportunity for people to make investments in companies whose values reflect their own. Whether you’re thinking of your corporate values or personal values, investments can be guides based on what action you wish to impact.
Similar to the increase in transparency that’s demanded by citizens, investments can increasingly match your values. Corporations are no longer just responsible for their bottom line, but are held accountable for their employees, customers and the environment leaving beneficial effects on all shareholders as well as the company’s long term value.
With so many challenges facing sustainability today, the world economy will have to undergo huge changes, especially in regards to the sectors of energy, transportation, manufacturing and production, and waste management industries. Innovative companies who are successful in providing solutions to such global challenges are just the tip of the iceberg for global sustainability trends.
The Growth of Socially Responsible Investing: How has Investing Developed?
Socially responsible investing involves making investments to companies who meet a certain threshold of social responsibility. Rather than only striving for the highest return possible, SRI screens companies based on other factors;environmental, social and governance measures with the intention of receiving a financial return. The expected outcome? A step forward to solving social and environmental problems.
The concept is growing internationally and growing fast. Between 2012 and 2014 alone, global socially responsible investing assets grew by 76%, or up from $3.74 trillion to $6.57 trillion. Alongside this growth, the number of mutual funds in relation to sustainability also grew. The interest has risen by an impressive 61%, exceeding the growth of professionally managed assets, according to the 2014 Global Sustainable Investment Review.
Between 2012 and 2014 alone, global socially responsible investing assets grew by 76%, or up from $3.74 trillion to $6.57 trillion.
Further, by 2015, $1 from every $5 invested in the United States was invested according to socially responsible investing principles. In fact, academic studies have shown that companies with high environmental, social and governance standards outperformed companies with low or no standards.
SRI challenges traditional views that social issues should be solved by philanthropic efforts, whereas market investments focus only on achieving a high financial growth.
Companies Investing in Progress
Swell’s promise is to “Invest in Progress”. Their portfolio allows customers to invest in Renewable Energy, Green Tech, Disease Eradication, Clean Water, Zero Waste and Healthy Living. They carefully select companies who are both set up for high growth and companies who are addressing global challenges, so their investments deliver on the two fronts of SRI: profit and purpose.
Wealthsimple builds a personalized portfolio designed to meet their customer’s needs. With their socially responsible investing offering, this service allows customers to feel good both financially and morally; from Low Carbon Targets to Cleantech and more.
Have you ever made a socially responsible investment? We’d love to hear about it in the comments below.
Are you looking to get started on your corporate giving? HeartPress PR can set you on the path to giving back that best suits your company’s values, interests and capabilities. Find out how you can create the right community investment portfolio for your business.