When it comes to investing their money, many people need more support. This is especially true when it comes to investing in companies that aren’t just driven by making profits. For this reason, many people have been hesitant about putting their money in anything that could not generate quick returns or potentially lose value.
However, emphasizing social responsibility doesn’t mean you have to give up your desire for profits—in fact, it’s quite the opposite. Ethical investing will provide you with financial returns and other benefits that we shall list in this column.
Read on to learn why humanitarians need to know more about the world of ethical investing and how practicing it can improve society as a whole.
Encourage Corporate Social Responsibility and Collaboration
There’s a growing consensus that businesses that contribute to society in meaningful ways are more likely to be profitable and successful. This has led to more companies taking up CSR practices for various reasons.
Corporate social responsibility (CSR) is the practice of a company using its resources and impact on society to address the community’s needs. CSR is not a new concept — it’s been around since the 1960s — but it took off in the late 2000s due to increased environmental consciousness and companies’ impact on society.
So, how can you encourage CSR and SI in your portfolio? One way is to invest in a socially responsible mutual fund that provides financial support to socially responsible companies, enabling impact investors to participate in a growing trend without having to do the legwork themselves.
Know How to Build Wealth Sustainably
As explained earlier, sustainable investing is about investing in businesses and assets with a high probability of long-term success. Doing so will ensure that you don’t put all your eggs in one basket, leaving you vulnerable in the event of failure.
Sustainable investing can be especially beneficial for those who want a positive social impact. For example, you can invest in sustainable agriculture, renewable energy, and companies supporting fair employment practices such as gender equality and diversity in the workforce.
Use Money for Good
As humanitarians, we’re naturally drawn to things that have a shiny, new look. Investing is no exception. The more money you put into your portfolio, the more likely it is to produce positive returns.
So, if you aim to make a positive social impact, putting some of your investments into socially impactful companies could be worthwhile.
Again, this can be done through ethical ETFs or impact investing platforms that allow investors to fund companies working to make a positive change. It could be improving people’s lives in developing countries or providing education to underprivileged children.
When it comes down to it, investing ethically is about using your money to do good. It aligns your interests with society’s, allowing you to generate greater returns on your money while satisfying your own self-interest to achieve social good.
For those reasons and more, as pointed out in this column, it’s so important for humanitarians to be knowledgeable in ethical investing so they can be able to make informed financial decisions.