68 HOLIDAY 2013 boatingonthehudson.com
Socially Responsible investing:
Aligning Your Money With Your Values
Article provided by Art Stahl
For most investors, the deci-
sion to invest in a particular
stock, bond or mutual fund
is based on their assessment
of that investment’s ability to
make money for them. But
there is a growing number of
investors who, in addition to
seeking financial returns, are
looking to invest in companies
whose business aligns with the
investor’s social and ethical
view of the world. This article
introduces the concept of “so-
cially responsible investing”,
or SRI. AFS
Whether the focus is on ad-
vancing environmental causes,
building healthy communities,
or promoting corporate ethics,
investors interested in mak-
ing a difference in the world
are spurring interest in socially
responsible investing (SRI),
also known as sustainable and
responsible investing.
Sustainable and responsible
investing traces its roots to
religious concerns, and it ex-
panded in scope in the 1970s
and 1980s as investors joined
other protestors against apart-
heid by choosing not to invest
in companies involved in South
Africa. From there, the defini-
tion of SRI evolved to include
the avoidance of “sin stocks” --
stocks of companies that derive
earnings from gambling, alco-
hol, and tobacco. More recent-
ly, the concept has expanded
further to include any number
of social and environmental is-
sues as well as a growing con-
cern with “corporate character”
-- seeking out companies that
have commendable records on
corporate governance.
Sustainable and responsible in-
vestments accounted for more
than $3.7 trillion in assets un-
der management as of 2012.1
Depending on a particular
portfolio and its investment
directive, SRI criteria are broad
and potentially can include:
• Corporate governance,
or how a company’s manage-
ment team shares rights and
responsibilities with sharehold-
ers.
• Environmental practices,
such as forestry, mining, waste
disposal, or hydraulic fractur-
ing.
• Employment policies,
including diversity.
• Practices of global sup-
pliers.
• Health issues, including
products that could contribute
to addiction or obesity.
• Military use of a com-
pany’s product or service.
• Products that are incon-
sistent with certain religious
beliefs, such as their use in
abortions.
• Geopolitical factors,
such as a presence in a country
where the government has sup-
ported war or genocide.
For example, environmental
investment factors are incor-
porated in the management of
551 investment vehicles with
$240 billion in assets under
management.1
SRI has both advocates and
critics. Those with a skeptical
eye contend that investment
decisions should be made sole-
ly on the basis of investment
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