Insights + Resources

Socially Responsible Investing and You

Jan 31, 2020

SRI (Socially Responsible Investing), Impact Investing, and ESG (Environmental, Social, and Governance) Investing belong to a growing category of investment choices that use traditional investing practices to responsibly impact society.

In the past, these investment strategies were viewed as too restrictive for most investors. But over time, improved evaluative data and competitive returns have pushed these strategies into the mainstream. Even though SRI, ESG investing, and impact investing share many similarities, they differ in some fundamental ways. Read on to learn more.1

ESG Investing assesses how specific criteria of an investment, such as its environmental, social, and governance practices, may impact its performance. These factors are used in an evaluative capacity. In the United States alone, there are more than 350 ESG mutual funds and ETFs available.2,3,4

SRI (Socially Responsible Investing) uses criteria from ESG investing to actively eliminate or select investments according to ethical guidelines. SRI investors may use ESG factors to apply negative or positive screens when choosing how to build their portfolio. For example, an investor may wish to allocate a portion of their portfolio to companies that contribute to charitable causes. In the U.S., more than 12 trillion dollars are currently invested according to SRI strategies.4,5

Impact Investing or thematic investing differs from the two above. The main goal of impact investing is to secure a positive outcome regardless of profit. For example, an impact investor may use ESG criteria to find and invest in a company dedicated to the development of a cure for cancer despite whether success is guaranteed.6

The biggest take away? There have never been more choices for keeping your investments aligned with your personal beliefs. But no matter how you decide to structure your investments, don’t forget it’s always a smart move to speak with your financial professional before making a major change.

Tags: , , ,

More Insights

Market Performance is a Tale of Haves & Have-Nots
Jul 15, 2024

The S&P 500 strung together 37 record highs this year aboard an 18.1% rally, as of July 10. The advance has largely been powered by a handful of mega cap names tied to technology and/or artificial intelligence. In fact, six stocks — NVIDIA (NVDA), Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Meta (META), and Alphabet (GOOG/L) … Continue reading “Market Performance is a Tale of Haves & Have-Nots”

Should You Care What the Stock Market Does Each Day?
Jul 12, 2024

Investors are people, and people are often impatient. No one likes to wait in line or wait longer than they have to for something, especially today when so much is just a click or two away.

Are You Retiring Within the Next 5 Years
Jul 10, 2024

You can prepare for the transition years in advance. In doing so, you may be better equipped to manage anything unexpected that may come your way.

Charitable Giving
Jul 8, 2024

When developing your estate plan, you can do well by doing good. Leaving money to charity rewards you in many ways. It gives you a sense of personal satisfaction, and it can save you money in estate taxes.

Retirement Wellness
Jul 5, 2024

How healthy a retirement do you think you will have? If you can stay active as a senior and curb or avoid certain habits, you could potentially reduce one type of retirement expense. Each year, Fidelity Investments presents an analysis of retiree health care costs. In 2023, Fidelity projected that the average 65-year-old couple would … Continue reading “Retirement Wellness”

Insights + Resources >