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Socially Responsible Investing - What is it?
Socially Responsible Investing
So what does socially responsible investing (or SRI) mean, exactly? Socially responsible investing is a rather broad term really, that describes not so much a strategy for investing as an approach to investing. The easiest way for me to define Socially Responsible Investing is to say it is an approach to investing where the investor is taking into considerations ethical, personal, religious, and morals in their decisions for investments.
Socially Responsible Investing, or SRI will make either perfect sense to you, or seem rather odd and tend to make no sense at all. It just completely depends on one's personality and outlook in life. It all depends on who you ask. Generally speaking, investors care more about things like market share, revenue, expenses and one's personal earnings. People that are engaging in socially responsible investing are not necessarily not caring about those same things, but many might say that they think it wise to consider more than just those things in their decisions. You are really covering more ground, getting more done perhaps in the long run and including things that you care very deeply about. This makes a lot of sense to a lot of people.
Socially Responsible Investors are concerned with other than the typical matters that most investors concern themselves with, and bring in a whole new component you could say. SRI tends to look at a whole set of issues, which you will find vary from one group to another, as important as the earnings per share. These kinds of investors usually seek to invest in those things that contribute say to a greener environment, or things that focus on treating all people fairly, or generally reflect their outlooks on life as reflective of each ones held world view. So you see SRI with things having to do with equal opportunity or investments relating to world peace somehow.
That said, if a company is engaging in things that go against an investor's values, they likely won't be interested nor invest with them. One's personal values really act as a guide for how that person invests their money.
Is there more to SRI?
Socially responsible investing is often more than what I describe above. Some people that practice SRI take a rather proactive stance with their socially responsible investing. They work hard to change companies that might have a rather poor record in the "values department" that are important to the investors. So owning stock in a company can give the investors certain rights or access which non stockholders don't enjoy. These could be termed proactive socially responsible investors use these things to pursue change within a given corporation.
I have to admit, that with a lot of what I am seeing in the world today, this concerns me. I mean depending on who has the money to invest. In my lifetime, I haven't seen so many people that I have diametrically opposing views with in just the "moral department", never mind religious views. I am speaking of just ideas of "live and let live" and pursuing peace for all people and without distortion of truth by those that only pretend to want that. That perhaps, is a whole other hub though.
One encouraging note to observe is that some use this same kind of power of their investment "dollar" for community investing. This means they are seeking out investments that directly impact low income communities that traditionally get overlooked by mainstream financial institutions. This seems to be doing some real good for those little pockets here and there that may be struggling and usually overlooked. Thank you to all who invest to help bring peace for people and a better life for everyone. I think it is a worthy goal for sure.