Socially Responsible Investing (SRI) is a way for you to invest in a manner that aligns with your values. According to the Calvert Institute for Responsible Investing: “Investors are increasingly interested in discussing how environmental, social and governance (ESG) strategies can be implemented into their portfolios. Available data indicates that investors across age ranges and income levels are showing greater interest in ESG investing. Where client and advisor interests go, assets follow.”
The definition of socially responsible investing has evolved over time. It may be referred to by different names, such as sustainable and responsible investing, green investing, or values-based investing. It is an investing strategy that aims to lead to social change while generating returns for an investor.
Whatever term is used, this investment discipline is characterized by a set of principles that govern how investments are selected.
One widely used framework includes environmental, social, and corporate governance criteria (ESG).
Learn more about Socially Responsible Investing (SRI) basics and how Espira Wealth Management can help you get started with sustainable investing selections.
Environmental, Social, and Corporate Governance (ESG) criteria of good corporate governance, positive environmental impact, and responsible community involvement are a guide for making investment selections, akin to other investment-related criteria, such as price-to-earnings ratio or revenue growth.
The underlying belief is that good corporate practices may lead to better long-term corporate performance.
Investing in SRI/ESG mutual funds or Exchange Traded Funds (ETF’s) gives you the opportunity to make an impact in several ways:
NEGATIVE SCREENINGThis is often the first step and aims to avoid companies that do not meet certain criteria.
POSITIVE SCREENINGMany funds also take this second stop to invest in companies that are making a positive social or climate/environmental impact.
CORPORATE ENGAGEMENTThe biggest impact can be made by adding this third strategy to promote change at the corporate level through proxy voting, corporate engagement, and shareholder activism.
If you want your investments to have a positive Social Impact or Climate Impact – or both – let's talk about your options! Call us at 512-691-5054 or send us an email.
With our holistic planning approach, we can show you how you can do well by doing good.