From Guest Blogger JT: What Is the Value in Socially Responsible Investing?
Money. It’s tough to make, but often even more difficult to determine how to spend it. Market conditions, risk analysis, and estimated ROI are just a few of the factors you will have to review to determine what makes the most financial sense. Even more – you’ll have to evaluate the purpose behind your investment. What type of company are you purchasing stock from? Do their organizational goals align with your own morals? Are the actions this company takes to make money follow appropriate and ethical business practices?
The decision can be overwhelming. Luckily, an emerging trend in the investment sector allows you to make investments in companies that do business in positive and socially responsible ways.
What Is Social Responsibility Investing?
Social responsibility investing (SRI) is an investment model that combines a company’s socially good philosophy with its financial gain. In other words, SRI focuses on an all-encompassing bottom-line — one that does not stop at providing investors with a positive return on investment, but the ability to be proud in promoting the responsible actions of that company.
It has become increasingly essential for businesses to make a commitment to giving back to their communities or a greater global impact. Not only do socially responsible companies have greater reputations and brand images than competitors that do not actively participate in social responsibility, but they are more likely to treat employees better, increasing morale and productivity.
Making the conscious choice to invest in the moral assets of a company prove more value than just higher returns.
Benefits of Social Responsibility Investing
The social responsibility investing model offers a host of benefits to businesses and investors of all types. With SRI, you can:
1. Promote Goals
The most impactful part of choosing SRI is that investors can promote companies whose organizational goals most closely align with that of their own. There are many different goals that a company can aim to achieve that fall into the following categories:
- World peace: Those who wish to promote world peace have the bigger picture in mind. Investors with this mindset often choose companies that aim to bring the world together.
- Health: Goals related to health can cover a diverse collection of topics. Whether it’s putting an end to the opioid epidemic or encouraging more kids to get out and play, these investors have the best version of every individual in mind.
- Environmental: These goals expand on the commitment to reuse and recycle. These goals are focused on making our environment cleaner and greener in hopes to leave the world better than it was first found.
- Safety: Goals in this sector focus on the well-being of individuals. Its focuses include community-based pledges to not text and drive to globally focused efforts to end human trafficking.
- Civil rights: Investors whose goals are centered around the idea of equality are likely to invest in companies that promote proper human rights, including working conditions and wages.
2. Ensures Your Commitment
The second benefit of being an SRI is that it puts an action behind the statements you claim. If you claim to be an avid civil rights advocate yet invest in a company that conducts business in foreign factories with poor working conditions and unfair wages, it’s likely that you will not be taken seriously. Socially responsible investing can keep your investments in-line with your personal declarations.
3. Become an Advocate
Not sure what goals you’re passionate about? Invest in a firm that truly cares about its social impact. It’s easy to jump on board for a company following ethical practices and building a strong reputation beyond its financial performance.
4. Promote Gains in the Company
When you choose to invest in a socially responsible company, you are helping the company win. With your financial contributions, not only can they provide you with a higher return but continue to give back and expand on their goals! Local communities and organizations will benefit and improve as a result.
Why Should More Investors Choose SRI?
The entire purpose of investing your money is to encourage growth. Why should growth only apply to your return? By choosing to invest in socially responsible companies, you can sleep well at night knowing that your contributions are helping make the world a better place.
