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Socially responsible investing is the process of matching your money and your value system. Socially responsible investors consider companies’ policies, values, and products before they invest, asking, "Do I believe in this company? Can I take pride in supporting this enterprise?" There are thousands of ways to invest responsibly. The more you learn about the topic, the more you’ll want to learn. Even if you’re not an investor, you’ll learn how to choose companies that empower your values whenever you do business. That’s why I’m starting this series with a primer on the topic of socially responsible investing (or SRI) and suggestions about where you can find more information. One of the terms you’ll hear frequently in SRI circles is screening. This is one of the most dynamic aspects of social investing. It’s also where you, as an individual investor, wield the most power. After all, you decide what goes into your portfolio, right? There are two types of screening, avoidance and affirmative. Avoidance screening is probably the most common. Someone who opposes tobacco use, for example, might use avoidance screening to eliminate investment candidates that support the tobacco industry. Such an individual wouldn’t want to invest any of her hard-earned money in a company that is tied to tobacco. Affirmative screening takes the opposite approach. Let’s imagine this same investor has a young child at home. She could use affirmative screening to select companies that are manufacturing organic foods for children. So where do you go to find out if a company has ties to the tobacco industry, if they secretly (or not so secretly) sell pornography, or if they engage in other business practices you’d prefer not to support? And how do you find companies that are doing great and wonderful things for the world? A few good magazines are among my favorite places to find information; I’ve listed them below in the resources section. They always have the latest information, including commentary on issues I never would have thought of on my own. The profiles of new and exciting companies can give you ideas for new investments, as well as inspiration after a rough day. You can also start by viewing the Web site of a company you’re considering (or searching your favorite investment site), looking for press releases and other information that might hint at issues you want to research further. Socially responsible mutual funds employ professional screeners who spend their time watching companies for corporate responsibility, so check out some of their Web sites to see if your prospective company is listed. This will help you determine whether you’re on the right track or have been "greenwashed." Another piece of the socially responsible investing pie is community investing. Community investing is simply that — investing money in a community, where it grows the resources necessary to directly help the people who need it most. The recipients of community investing are people who don’t qualify for traditional loans. This capital helps them start their own businesses, buy homes, and develop their community with childcare and jobs. According to the Social Investment Forum, community investing is the fastest-growing area of social investing in the U.S., with a growth rate of 41 percent between 1999 and 2001. Information on community investing can be more difficult to find, especially if you want to invest right in your own backyard. Without a doubt, the best place to begin your search on any community investment topic is at <www.communityinvest.org>. You’ll find plenty of resources and articles, as well as suggestions for bringing community investment to your own neighborhood. Since investing in a bank that does community investing is no different from banking with any other bank (FDIC insurance and all!), you simply need to shop around for the bank that offers the best account for your needs. However, if you decide to invest in a community development loan fund, you’ll notice a wide range of products and returns. Other sources of information include <www.cdfi.org> and the National Community Capital Association at <www.communitycapital.org>. Shareholder activism has been receiving a lot of news in the past couple of years and will probably continue to grow exponentially as the American public works to change the face of big business. Any shareholder who has owned a minimum of $2,000 in stock for at least a year and adheres to the other regulations set forth by the SEC can file a shareholder resolution. Many of the shareholder resolutions filed this year focused on environmental policies, the arctic drilling issue, and fair labor standards. As a first step, you’ll obviously want to vote on any shareholder resolutions you receive as a stockholder. You can keep up on the latest resolution news at <www.shareholderaction.org>. The shareholder activism section at <www.sriworld.com> is also useful for research. SRI is an exciting topic for a journalist to cover because there are no rules. Practice what you believe in, and you will find that the world just opens up. Whether you are an investor with a large portfolio or simply someone who wants to invest at the consumer level, you are welcome. Making intentional choices about the products you purchase, the trips you take, and the companies you help support is very empowering. You are not simply left to the whims of fate or greed. Instead, you are making the world a better place — whatever that means to you. CERES — The Coalition for Environmentally
Responsible Economies Interfaith Center on Corporate Responsibility
(ICCR) Social Investment Forum Green Money Journal Domini Social Investments Utne Reader Calvert Funds Investing With Your Values: Making Money
and Making a Difference by Hal
Brill, Jack A. Brill, and Cliff Feigenbaum. Mother Jones Socially Responsible Investing: Making
a Difference and Making Money by
Amy L. Domini. LOHAS Journal Sheri Wallace is a freelance writer from Tucson, Arizona. She writes frequently on social investing issues, and will be contributing future articles in this series. |