WHAT IS SOCIALLY RESPONSIBLE
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Socially responsible investing is the practice
of investing according to personal ethical criteria.
On one level, it involves avoiding investing in products and
industries that run counter to what the investor believes is best
for the world. It also involves actively seeking out opportunities
that the investor believes promote positive economic and social
Socially responsible investing began in American churches as a
way to invest church funds in industries that promoted ethical and
religious goals. Alcohol, tobacco, gambling, and weaponry were
among the more commonly weeded-out investments.
"Responsible investing" is a very subjective term. What one
person calls responsible, another may not. For example, a company
may have a good record for hiring minorities. It may also fund
projects that benefit the community. However, this same company may
also produce a product that pollutes the environment or that has
been shown to affect human health adversely.
Some investments fit many investors' concepts of responsibility
without expressly being called "responsible." Municipal bonds, for
example, finance hospitals and libraries, among other projects most
people consider socially beneficial.
Although many people question the profitability of investing
according to ethical goals, many others believe that it ultimately
works for profit rather than against it. Investors of this type
note, for instance, that healthy workers are more productive and a
protected environment yields more food and other products.
With all this in mind, what do investors look
for when they seek to invest ethically? We will look at that