Socially responsible investing, which can also be called “sustainable investing” or “responsible investing”, is a new and socially conscious way to approach investments. The term refers to all those kinds of strategies that have of course the purpose to have a financial return, but also to create a good social and environmental impact aimed at a positive change. In a more specific way, it is considered as ethical investing every economic strategy that seeks to avoid any harm in the social and environmental sphere. Once thought to be a kind of investment for a niche sector, nowadays socially responsible investments are really popular, not exclusively among companies and assets that have positive social impacts, but also among any other kind of business. This kind of trust deed investing companies strategy has been growing in popularity in the last few years and it’s slowly starting to embrace a really wide audience. Of course, for an investment to be considered fully ethical and green, companies or private investors tend to avoid all those businesses involved in the production of goods that are considered to be bad for people or for the environment. For a better comprehension of this matter, we made a list of examples and requirements that an investment must meet in order to be considered really ethical and sustainable.
Examples of socially responsible investing
As previously mentioned, nowadays more and more companies are adopting ethical strategies as an essential part of managing their business. But what is responsible investment? Here’s a list of good examples:
- First of all, for an investment to be considered really ethical and socially conscious, companies or private investors have to pay attention to what a company produces before making an investment. It is always preferable to direct one’s attention and funds to corporations, associations and organizations known to have a positive impact on the environment, on society, or even on small communities. In a more specific way, a sustainable investment can be directed to all businesses that choose to have an ethical approach towards everything they do or produce.
- Companies that really want to make a change and have a good impact on the world generally have a different way of calculating their work performance: the economic return is no longer the only aspect to take into consideration. Ethical, social and environmental issues are now really important matters, and new significant parameters that must be considered to fully understand whether or not the corporation is having a good impact on the world.
- Lastly, companies that really long to make a difference in the world generally tend to financially support socially active organizations. The contribution provided by these companies represents a significant help for organizations that struggle to gain funds from financial institutions or banks, and they allow them to provide new services to their cause or community.
How to make an impact through socially responsible investing
Once acknowledged what socially responsible investing really is, what is the best way to make a company greener by making conscious investments aimed to produce a positive impact on the world? Starting to make socially conscious choices can be hard for companies that always considered financial return as the only priority of their business performance. In order to make impact investing a significant part of a company’s or private investor’s goal, it is crucial to define the reasons behind this choice. What kind of change does the company want to achieve? How much time, effort and resources are available to make this change happen? The answers to these questions are really important to define a strategy able to really make a difference and to provide a good economic return as well. In order to avoid making mistakes or supporting an organization that doesn’t have the power to really make a change in the world, investors can ask for the support of an industry professional, who will surely have the necessary skills to advise them on the best way to have a good social or environmental impact on the world while growing as a company. Nowadays it is really easy to find extremely competent and capable consultants who can help create a detailed plan aimed at improving a company from an ethical point of view.
“Pop culture advocate. Troublemaker. Friendly student. Proud problem solver.”