Review of Socially Responsible Investing Tools: Making Informed Decisions
Review of Socially Responsible Investing Tools
Introduction
Socially responsible investing, also known as sustainable, socially conscious, “green” or ethical investing, is a strategy that seeks to consider both financial return and social/environmental good to bring about positive change. There are several tools available to help investors make informed decisions when it comes to socially responsible investing.
1. ESG Ratings
ESG stands for environmental, social, and governance criteria. ESG ratings are used to evaluate companies based on their performance in these areas. There are several organizations that provide ESG ratings, such as MSCI, Sustainalytics, and FTSE Russell. Investors can use these ratings to identify companies that align with their values and goals.
Steps:
- Research different ESG rating providers
- Compare ratings of companies in your investment portfolio
- Use ratings to make informed decisions on where to invest
2. Impact Investing Platforms
Impact investing platforms are online platforms that connect investors with opportunities to invest in projects or companies that have a positive social or environmental impact. Examples of impact investing platforms include Swell Investing, OpenInvest, and Ethic. These platforms allow investors to invest in specific causes or industries that align with their values.
Steps:
- Sign up for an impact investing platform
- Explore investment opportunities on the platform
- Invest in projects or companies that align with your values
3. SRI Funds
Socially responsible investing (SRI) funds are mutual funds or exchange-traded funds (ETFs) that incorporate ESG criteria into their investment strategies. These funds allow investors to diversify their portfolios while supporting companies that are making a positive impact. Examples of SRI funds include the Vanguard FTSE Social Index Fund and the Calvert Responsible Index Fund.
Steps:
- Research different SRI funds
- Consider the fund’s investment strategy and performance
- Invest in SRI funds that align with your values and financial goals
Conclusion
Socially responsible investing tools provide investors with the resources they need to make informed decisions when it comes to aligning their investments with their values. Whether using ESG ratings, impact investing platforms, or SRI funds, investors can support companies that are making a positive impact on society and the environment while still achieving financial returns.