Through socially responsible investing we can use our money to invest in companies that are improving our environment through clean renewable energy, and companies that are improving our society in some way. Socially responsible investing (SRI) also excludes companies making a negative impact on our planet and society. For example, coal companies, weapons and firearms manufacturers, tobacco companies, and for-profit prisons may be excluded in an SRI mutual fund.
The over 300 SRI funds vary in their investment priorities, so it is worth taking some time to find an SRI that is aligned with your values. I wasn’t choosy about my SRI mutual fund because I couldn’t be. I was limited in my choices due to investment parameters set by my employer. However, I was thrilled when I had the opportunity to invest money in an SRI fund, because it is much more aligned with my values than a traditional mutual fund.
Do SRI investments perform well compared to standard investments? Yes they do. A 2020 research analysis from Arabesque Partners found that in 80% of the reviewed studies, sustainable investments had a positive affect on the performance of the investments. Also, SRI mutual funds may be more stable than standard funds, according to studies.
Charitable giving is a way that we take care of each other and our Earth. Another way to put our money where our values are is with socially responsible investments. Let your financial investments work for positive change in the world while building up your savings for retirement.
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