What is a Socially Responsible Investment? And Why You Should Try It.




(ThyBlackMan.com) Remember when you were young, and your mother told you that it was important to do the right thing even when nobody was looking? Well, she was right in more ways than one, and she wasn’t even talking about socially responsible investment.

The definition of social responsibility has changed over the years, especially with reference to businesses. Let’s look at a socially responsible investment strategy and why it’s important.

The Transformation of Social Responsibility

A decade ago, when a company built a community well in another country so people could have access to clean water, they may have been considered a socially responsible investment because of the good they did for people with part of their profits.

That may have been enough for people to look the other way when the many factories owned by that same company polluted the air and water in another community causing numerous health problems for the inhabitants. The way its employees were treated wouldn’t have even been part of the equation.

This is no longer the case. Socially responsible investment is held to a higher standard. Quantification puts a dollar value on everything a company does, giving us a standard to apply across the board with easy-to-read results.

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Defining a Socially Responsible Investment

A socially responsible company is a company that basically adheres to the golden rule. It does well for the world around it. Its products don’t harm people or the environment; it treats its employees well and makes a profit for its stakeholders, who are also treated well.

Quantifying a company’s value can help to determine if it’s a socially responsible investment or not. For instance, a company may treat its employees well and produce a profit for its stakeholders. They would get positive values for that.

However, its factories may release harmful cancer-causing carcinogens into the air while making its product. The factories may also pollute the water around them, killing the wildlife, so it would get negative values for these. These would not be small negative values, and therefore, this company would not be considered socially responsible.

The Value of a Socially Responsible Investment and Why You Should Try It

A socially responsible investment begins with you and what you’re passionate about. You may be passionate about environmental sustainability or minority-owned businesses. Whatever it is, if you can clearly define your goals, you can find socially responsible investments to support them.

Choosing a socially responsible investment strategy means you can feel good about investing and still make a profit. You can also be the start of social change. When we invest in companies that are socially responsible, then other companies take notice and will eventually begin to change the way they do business.

Socially Responsible Investing at its Best

Making socially responsible investments is the best way to support humanity and the environment. If more people choose a socially responsible investment strategy, then corporate entities will change the way they conduct business for the better – choosing not to harm humanity or the environment to the best of their ability. A socially responsible investment strategy still supports your personal goals, only with socially responsible investments. Change the way you invest for the better and choose a socially responsible investment strategy.

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Staff Writer; Jerry Brown