Socially responsible investing is now a rising market, driven primarily by younger investors who grew up learning about the importance of preservation and eco-friendly practices. Investors are also catching onto the fact that socially responsible investment portfolios, often referred to as “SRIs,” can provide strong investment output and, in many cases, outperform non- socially responsible investment counterparts.
Responsible investing goes beyond supporting companies that institute environmentally friendly practices. Other values, like labour practices, human rights, and health and corporate governance, impact these investments while offering profits for those who invest.
In their most basic form, socially responsible investment portfolios are a type of investment that meets a particular social responsibility threshold. For this reason, they typically exclude investment options some view as “bad” for the world and society and include sectors with a social benefit, like renewable energy or healthcare. These investments also include companies that have a strong track record for environmental, social, and governance (ESG) issues.
To find SRIs, you can look for the investment’s environmental, social, and governance rating, which is typically assessed and assigned by an independent third party. The higher the rating, the more the investment complies with environmental, social, and governance criteria. This score ultimately reflects the company’s handling of social issues today, like transparency and disclosure, carbon emissions, human rights, pollution, and health and safety, just to name a few.
If you are curious about building a socially responsible investment portfolio, we encourage you to read this case study to start. Then, if you want to know more about how to fit socially responsible investing in with your financial goals, set up an appointment with your BlueRock Wealth Management Advisor (or request an appointment if you’d like to discover if we are a good fit for you).