It’s not all about money. We all know that. As people, as citizens of our countries and of our world, we are all interconnected, and we all have a responsibility to try to ensure good things are encouraged and bad things discouraged. One of the things you can do to ensure this is practice socially responsible investing.
That doesn’t mean that there are sixty specific things you can’t invest in and call yourself socially responsible. Investing, like everything else in your life, is heavily dependent on what you believe. If you have a soft spot for dogs and other animals, you probably don’t want to invest in companies that practice animal testing with their products. If you strongly oppose nuclear technology, you should withhold your investments from anything promoting nuclear, and instead invest in practical energy alternatives.
In other words, socially responsible investing is dependent upon your personal feelings. But there are several things you can do to ensure that your investments go only to companies and practices you believe in, and you’ll still make money.
Prioritize. It may be hard to find a company that does everything you want and doesn’t do anything you’re against. Make a list of movements and causes you believe in, and decide what’s most important to you. Then you can more easily target your socially responsible investing. You may not be able to stomach investing in a pharmaceutical company, for instance, but be more flexible about investing in a free-range chicken company.
Ask questions. If you talk to the company you’re considering investing in, they may be able to enlighten you on what they do and who they help. Try to ask nonleading questions if possible; some companies may be eager enough to get your investment that they’ll avoid telling the whole truth if they know what you really want to know. The real key to socially responsible investing is information.
Check up on the company. No matter what you’re told, companies do sometimes practice deception, even if they call it spinning or good PR. If you have reason to think your socially responsible investing is really going toward things you don’t believe in, contact organizations that agree with your perspective: Amnesty International, the ASPCA, NOW. Let them know what you’re doing and ask what they know about this company. If there’s something negative going on, they’ll know about it.
Check up again periodically. Companies change policies, especially if there’s a transfer of power or a company restructuring. Companies that don’t invest in child labor, may change their policies or look the other way when a new CEO takes over. Conversely, companies that you refused to invest in because of their practices might also clean up their acts. In order for socially responsible investing to work toward social change, you must be vigilant and aware of what’s going on in the companies where you hold an interest.
Always look for ways to promote your causes with your financial power. In today’s world, money is power. If you have a lot of cash to swing around, you can make a real difference through socially responsible investing. For instance, you find out about a viable source of alternative power, but the company holding the patent needs seed money. Your investment here has the potential of making a huge difference. On the other hand, investing in GE, while being very sound investing and socially responsible investing as well, won’t make as much of an impact.
Consider socially responsible mutual funds, too. TIAA-CREF, among others, has a socially responsible investing option in its stock portfolios, and it performs surprisingly well. If your mutual funds and 401K doesn’t have a similar option, ask about developing one. Enough people requesting socially responsible investing may encourage them to open the option – and a mutual fund can have an enormous impact in the financial world.
Watch what the government is doing. No matter what you’re investing in, the government will have an impact. Changing policies may dictate that you change your socially responsible investing patterns.
No matter what you choose to invest in, socially responsible investing allows you to put your money to work that you feel good about. Changing the world while still making enough money to be secure – it’s a win-win situation.