Are You Looking to Create a Positive Impact?
If
you’re concerned about social, ethical, and environmental issues you may be
pleased to learn that you can have a real, measurable impact by way of your investment
portfolio.
"Socially
Responsible Investing" (SRI), "social investment," or
"sustainable," "impact", "green," or
"ethical" investing is any investment strategy which seeks to
consider both financial return and social/environmental good. It allows your
investments not only to improve your own life, but also your community and the
world.
The importance of screening
One
of the challenges of Socially Responsible Investing is that it can be difficult
to identify the investments that will truly benefit you along with contributing
positively to the issues you care about.
To
ensure your investments are aligned with the social, environmental, and
community issues that matter most to you, in-depth screenings of companies and
their impact must be conducted, monitored, and reviewed.The corporate
structure, business practices, history, and—of course—the return on your
investment are examined in detail. This offers an extra layer of risk
management.
No
one should have to choose between building wealth and building a better
world. Companies with socially responsible corporate behaviour offer the
best prospects for creating and preserving long-term value, and with less risk.
Socially responsible investing lets you align your investment goals with your values,
so that you can enjoy competitive financial returns while making a positive
social impact. By selecting companies that improve our communities and our
environment, and by excluding companies that have a negative impact, you can
invest in companies that contribute to a better financial future for you and a
better world for everyone.
3 big factors
In general, socially
responsible investors encourage corporate practices that promote environmental
stewardship, consumer protection, human rights, and diversity. The areas of
concern recognized by the SRI practitioners are sometimes summarized under the
heading of ESG issues:
environment, social responsibility, and corporate governance.
Consider
these thought-starters when planning your investments.
Environmental
Performance
How
does the company act as a steward for the natural environment?
How
do its operations impact the environment?
Is
the company taking steps to reduce reliance on non-renewable energy sources?
Social
Responsibility
How
does a company treat people both inside and outside the company?
Do
they value diversity?
Do
they protect human and consumer rights?
Corporate
Governance
How
does a company govern itself?
How
are executives compensated?
Does
the company operate transparently and accountably?
Companies excluded from SRI are involved in industries that are
considered to be harmful to the community or the environment
·
Tobacco
·
Nuclear power
·
Military weapons
·
Pornography
·
Gaming
Creating long-term value
Sustainable
companies offer the best prospects for creating and preserving long-term value.
Investors monitor each company, and as stakeholders, encourage them to address
issues that could have a negative effect on the community or the environment.
For
example, SRI fund holders have worked to:
·
Improve conditions for factory workers in developing countries
·
Prevent the manufacture of products that contain toxins
·
Ensure company goods are not produced by slave labour
·
Uncover instances of child labour in mining operations
By actively educating
businesses about the impact of their operations, you can help them make
sustainable choices that improve people’s lives as well as your bottom line.
If you would like to
learn more about Socially Responsible Investing and how to make a measurable
impact in your community and beyond, contact Steve MacLellan today.
Steve MacLellan, P.Eng
“The Financial Engineer”
One
Number Solution Specialist and Responsible Investment Advisor
steve@thefinancialengineer.ca
902-240-6508
Comments
Post a Comment