Saving for your own retirement could be called a socially responsible, self-sustaining endeavor. By planning for your own future, you put yourself in a position to help others instead of depending on others. But many people find that they want to take their generosity to another level with Socially Responsible Investing (SRI).1
Socially Responsible Investing is a strategy used by investors who are looking to promote ideals and values they feel strongly about. For example, an investor who feels strongly about education reform might invest in Microsoft but avoid Berkshire Hathaway. That’s because the Gates Foundation2 actively supports education reform and Buffett’s Sherwood Foundation3 actively opposes education reform. Whatever your personal ideals, you can find ways to invest that will promote those concepts.
According to Forbes, SRI increased more than 76% to $6.57 trillion in managed assets during the period between 2012 and 2014.4 If you’d like to put your money where your heart is, you can participate in Socially Responsible Investing in the following ways:
Investing
As we mentioned before, you can invest in companies that you believe to hold the same values and ideals as you. Some of these values and ideals might include treatment of the environment, consumer concerns, employees’ rights, religious beliefs, human rights, support for education, and more.
New investing tools make it possible for you to screen funds based on a variety of SRI variables, such as which values companies emphasize and what kinds of charities they donate to. By putting your money where your heart is, you can influence the kinds of changes you’d like to see in the world around you.
Shareholder Advocacy
Another way to influence corporate decisions is to proactively make your views known to the companies you invest in. Putting pressure on entities to improve their policies and practices while at the same time promoting financial performance and long-term company value can help you to accomplish your social responsibility goals. This can be accomplished by filing resolutions for shareholders’ votes, attracting media attention to certain issues, and opening up dialogue with decision makers at the companies in which you’re invested.
Community Investing
A fast-growing area of SRI is community investing. With this type of investing, capital is directed to communities that are underserved by traditional financial lending institutions. Some of these communities are here in the United States, and some of them are scattered abroad. Community investing allows investors to earn interest on their money while helping to provide poorer communities with capital to invest in services like healthcare, childcare, housing, education, and infrastructure.
SRI Research
Socially Responsible Investing takes research. In order to support certain causes and advocate for your ideals, you need to spend some time reading and learning about companies, industries, and social causes. Our Wealth Managers can help you with this research if you are interested in pursuing Socially Responsible Investing as part of your retirement planning strategy. Contact us here or call us at 1-800-541-7774 to speak to a Wealth Manager today about your interest in SRI.
Sources:
1. Forbes
4. Forbes
