Posts Tagged ‘socially responsible investing’

What is Socially Responsible Investing?

Monday, July 11th, 2011

You may have heard about SRI, but odds are you haven’t heard the whole story. We explain it to you in about three minutes.

Socially Responsible Investing (SRI) is…

Tuesday, April 12th, 2011

Socially responsible investing connects your interests and personality to your financial resources. When you invest in a socially responsible way, you ensure that your portfolio earns a competitive rate of return while also making a positive social and environmental impact. For example, you might invest in companies that have good employee relations, diversity in the workplace, a commitment to clean air, or that use sustainable forms of energy.

Companies are deemed socially responsible by research firms such as Calvert, Social Funds, and KLD Research & Analytics. They evaluate a company on its level of social responsibility based on the quality of its social, environmental, and governance (management) policies.

So how do socially responsible investors find a company they want to invest in? They use a process called screening, which considers whether or not a company’s values align with their own. For example, some investors screen out companies that pollute, that abuse their workers, or that produce harmful products like cigarettes.

Once you’ve found a company you like and decide to invest, you become a shareholder of that company. At socially responsible companies that means you stay involved and informed in the goings-on of the business. This is because socially responsible management is committed to keeping shareholders in the loop, and shareholders are encouraged to be involved corporate management.

Socially responsible investing is also called mission-based investing, sustainable investing, ethical investing, green investing, responsible investing, and value-based investing.

So you want to be a socially responsible investor?

Friday, January 7th, 2011

joel-solomon.jpg Joel Solomon’s career is somewhere between entrepreneur, philanthropist, and activist. His philosophy is that companies should focus on socially responsible growth – meaning they should care about their impact on their society and the environment, but not give up on making money. Since 1996, he’s been the president of Renewal Partners, a company focused on creating a “triple bottom line” economy. And he’s a pretty big dreamer – while most companies focus on a 10 or 20 year strategic plan, Joel has a 500-year vision about how the work of current generations is crucial. He was nice enough to share a bit about his plans and how you can play your part in changing the world.

TILE: What is socially responsible investing?
Joel: Socially Responsible Investing is about placing your money into companies whose products and services represent your values and beliefs. Every dollar you spend or invest is a direct vote by you for what matters in life and on the planet.

TILE: How can businesses make money and be socially responsible at the same time?
Joel: Business can make plenty of money by being good citizens of the environment – for their workers, and for the communities where they make products and in those where they sell them. Good ethics and planet-responsible behaviour* are fully compatible with making reasonable financial returns. In fact, clear values and true purpose, when combined with the tools of business and money, make a powerful combo that can drive social change.

TILE: Why do you do what you do?
Joel: My life is committed to respect for the hard work my ancestors did to give me my life, and to do everything I can to see that what matters most to me is available to future generations. Those commitments led me to make business and finance serve my long term goals. Every day I get to meet some of the brightest, most creative, most inspiring entrepreneurs and leaders in the world. That’s my reward for staying true to my values and purpose.

TILE: How do you think young people can play a role in philanthropy?
Joel: Young people with access to philanthropy should learn all they can about the issues of our times, especially those that touch your heart and mind the most. Ask lots of questions. Read. Get exposed. Volunteer in organizations you believe in. Find a career that expresses your true values. Learn all you can about the non-profit world. Ask for observer status at foundation meetings. Ask for a small grants budget so you can gain experience making decisions with donations. Seek mentors and experienced advisors. Attend conferences.

TILE: What’s the best advice you would give to your teenage self?
Joel: Commit to your own maximum potential to learn, lead, and live, such that your life and work make a positive impact for today and tomorrow. Follow your inner calling. Develop creativity. Do deep work on yourself, soon, and continually.
Develop pragmatic skills. Travel. Be compassionate.

* Please excuse our extra ‘u’s. Though he was born in Tennessee, Joel is now a resident of sunny Vancouver, Canada.

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The Principles of Responsible Investment (PRI) are..

Wednesday, October 6th, 2010

The Principles of Responsible Investment (PRI) are the guidelines for investors who are conscious of environmental, social, and corporate governance (ESG) issues (like human rights or climate change, for example). Like the title says, they’re basically guidelines to help investors investing responsibly.

The six Principles say that “as investors,

1. We will incorporate ESG issues into investment analysis and decision-making processes.

2. We will be active owners and incorporate ESG issues into our ownership policies and practices.

3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.

4. We will promote acceptance and implementation of the principles within the investment industry.

5. We will work together to enhance our effectiveness in implementing the principles.

6. We will each report on our activities and progress towards implementing the principles.”

The Social Investment Forum is…

Wednesday, October 6th, 2010

The Social Investment Forum is an association for professionals, firms, and organizations that practice socially responsible investing. Members of the Forum work to come up with better strategies for managing socially responsible investments. Businesses and individuals are only allowed to join if their investments have a positive impact on society and the environment.

Shareholder Activism is…

Wednesday, October 6th, 2010

Shareholder activism is when a shareholder of a publicly-traded company uses their rights to pressure that company to make change. Basically, it’s a way that shareholders can influence and change a company’s behavior in a certain way. For example, shareholders may influence a company to become more environmentally friendly or disinvest from a country with a record of human rights abuses. Shareholder activism can take the form of voting for or against certain corporate actions or members of management, and/or in organizing groups of voters to block or force a corporate  action.

The Calvert Social Index is…

Wednesday, October 6th, 2010

The Calvert Social Index is a stock market index of companies that are considered socially responsible. It was created by Calvert Investments and uses Calvert’s social criteria to determine whether a company is socially responsible or not. This criteria relates to the environment, product safety, community relations, international operations, weapons contracting, human rights, and workplace issues. While the number changes frequently, as of August 2010, there were over  650 companies in the index.

A Triple Bottom Line is…

Wednesday, October 6th, 2010

A triple bottom line is when a company takes its environmental, social, AND financial performance into account to assess its overall performance. It takes the idea of a double bottom line (which considers the company’s social impact) one step further to include its environmental impact.

A Double Bottom Line is…

Wednesday, October 6th, 2010

A double bottom line is a way for a company to measure its performance in terms of positive social impact as well as financial success. While a traditional bottom line helps a company understand its financial profits and losses, a double bottom line factors in the greater social consequences to business decisions.

The Global Compact is…

Wednesday, October 6th, 2010

The Global Compact is a United Nations-sponsored voluntary initiative that guides businesses around the world in practicing corporate responsibility. Basically, it’s an effort to make corporations keep their business practices morally upright. The compact is made up of ten principles in the areas of human rights, anti-corruption, labor, and the environment. Through discussion and networking, businesses strive to achieve the goals set down in all ten principles.

The four main components of the Global Compact are:

  • Human Rights: Issues relating to human rights make up the first two principles of The United Nations Global Compact. They basically state that businesses should always protect and support people’s human rights.
  • Labor: These four principles state that businesses should uphold fair and non-discriminatory standards of labor for all of their employees.
  • Environment: Environmental stewardship is the topic of three of the principles in Compact. These principles state that a company should support and promote environmental responsibility in all of its corporate endeavors.
  • Anti-Corruption: The final principal of the Compact says that businesses should work against all forms of corruption, including extortion and bribery.