Socially responsible investing (SRI) is a strategic investment in companies observing ethical procedures and practices. Ethical practices broadly refer to any kind of process that is helpful for society and the environment. For instance, the manufacturing of products using green technology, being eco-friendly, is an ethical process. Therefore, any investment in factories employing green technology is considered socially responsible. On the contrary, investing in companies that deal with tobacco or firearms won’t be a responsible investment. This is because tobacco products are usually injurious to health.
Socially responsible investing is best for people who want to spend their money for noble causes. You can invest in companies having ethical business operations and providing products and services that can serve the society with any good. Companies working for waste-management, water purification, promoting a clean and green environment, and NGOs running for social causes are the few best choices for responsible investments. Note, these investments are not for generating profits but for building sustainability.
While all of this sounds a little sentimental, people often wonder if their money is worth social investments. Well, there is no defined answer to that. However, we can help you with such doubts. Here, we present 5 dignified reasons to opt for socially responsible investing. These reasons can help you decide if SRI can be a winning strategy for you or not.
You can support what you say
Almost all of us have our own beliefs and values that we stick with. For instance, some of us are committed environmentalists, some are against child labor, some support women empowerment, etc. SRI helps you to stick with these beliefs and live them out in everything you do. It helps you to talk the talk and walk the walk i.e. you can support what you say. Remember, SRI doesn’t ask for all your money rather you can pick a few socially responsible funds and go at your ease.
SRI allows you to take a stand
Socially responsible investingis like taking a stand and fixing situations that bother you. For instance, if businesses don’t behave properly, people can kick these bad apples out by holding back their investments. The likelihood of unethical business procedures can be minimized if the majority of people decide to invest in responsible businesses.
Similarly, supporting noble causes like no-child-labor, rights-for-all, etc. can help us eradicate many evils from our society. Investing in people doing the right things is one of the best ways to promote a righteous society.
A responsible investment brings inner satisfaction
Aligning your investments with your beliefs and values is a real satisfaction. You are working for a noble cause, investing your time, energy, and money for doing good to the world, what else do you think is peace and satisfaction? Plus, in case you generate some profit by SRI, the reward doubles; you used your money for good and you made money from the good. It’s a win-win situation in both cases!
Socially responsible investment funds have several classes including; environment, governance funds, impact funds, faith-based funds, etc. You can choose any class and make relevant funding. Any good that your money does will return to you as a reward. This reward can be in the form of financial profit or a sense of peace or inner satisfaction. In any case, SRI is a winning strategy for sure.