What Is Socially Responsible Investing?

Investing comes in many shapes and forms. However, one thing that is often talked about is socially responsible investing. But what is this, exactly? Is it something you need to be concerned about and how do you go about ensuring that your investments comply?

Read on to discover everything you need to know about making your investments work as hard as possible as well as making a valuable contribution to society.

All About Socially Responsible Investing

• Socially responsible investing. AKA, ethical investing
• The healthier approach to wealth

Socially responsible investing. AKA, ethical investing

The essence of investing is to provide money to a company for them to function and make a profit. The company grows and so, therefore, does the value of your funds. Every company has an impact on the planet and society. By investing in them, you’re also responsible for whatever this impact is.

Socially responsible investing is all about directing your funds into companies that have a positive effect. In the past, this often meant sacrificing profit for principles. But, thankfully, this certainly isn’t the case today.

In fact, socially responsible, or ethical, investing can bring about superior returns. This is due to global awareness of the need for companies to commit to their social responsibilities, lowering the risk of unforeseen challenges, and increasing their growth potential.

The healthier approach to wealth

In the past, some of the biggest gains often came from somewhat unethical companies. A good example is that of the tobacco industry. Great profits, but the footprint left on the planet, people, and society was not so good.

But the world is changing and with it our attitude towards our social responsibilities. While the pool of ethical companies in which to invest used to be fairly small, they are now far more mainstream. Sure, you still need to do your research, but both large and small investment opportunities with social responsibility are easy to find.

Another advantage of directing your investments into these companies is that they are less likely to suffer from fines and scandals due to non-compliance with regulations. They often have or are restructuring business models to adapt to long-term challenges, such as climate change.

How to Become a Socially Responsible Investor

• Research is key 

Research is key

Ensuring your funds are plowed into responsible avenues isn’t something that follows hard and fast rules. Your idea of what is socially responsible is likely to differ from other people. It’s necessary to determine the boundaries of what you consider to be acceptable.  In other words, there’s more than one way to be a responsible investor and this will be led by your principles.

There’s also the aspect of your investment approach. Funds are a less flexible option than, for example, shares. However, the latter means more work in researching the companies you consider investing in. While some have plenty of time to do this and are happy to do so, others might find it easier to rely on a socially responsible fund that they don’t have direct control over. 

Responsible investing is no longer something considered a bit ‘out there’. It’s a path that more and more of us are following, so forcing more companies to commit to social responsibilities. Every dollar that you direct towards those companies that do this is enforcing change for the good—and that only has a positive impact on everyone who lives on the planet today and will do so in the future.

Invest Your Conscience as well as your Money with Capita Expertise

At Capita, not only do we help you devise a strategy to maximize your investment opportunities, but we’re also staunch advocates for responsible choices. Our experts will discuss your options, gently guiding you towards the most beneficial outcomes that satisfy both your money goals and social responsibilities.

Discover more on our website and get in touch today. https://www.capitafinancialnetwork.com/services/tax-planning