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An Approach to Responsible Investing

An Approach to Responsible Investing

How do you instill your values in your everyday life? Maybe you take your city’s hybrid bus system to work, only driving your Toyota Prius on the weekends. Your home is stocked with energy-efficient appliances. You eat only organic products. And each year you give what you can to charitable organizations. But have you become a socially responsible investor as well?

If you are among the millions of Americans trying to round out their socially responsible lifestyle with investments, you may be uncertain how to assure your investments align with the values you strive to uphold. When it comes to investing, you don’t have to leave your values behind. Instead, they can become a roadmap for the development of an investment portfolio.

Responsible investing encompasses a number of investing approaches you may have heard of, including Socially Responsible Investing (SRI), Environmental, Social, and Governance Investing (ESG), and Impact Investing.

Responsible investing offers a high degree of flexibility. First, determine what is important to you. Then identify how you want to act on your beliefs.

[Related: Five Ways to Do More Good (And Save On Taxes, Too)]

Withdraw support.

By choosing to avoid securities of issuers that gain financially from activities that you may find disagreeable, you can use SRI best practices to withdraw support of the issuer by not participating in its economic success.

Proactively support.

By choosing to invest with money managers who seek securities that demonstrate high performance on metrics consistent with your values, you can use ESG best practices to proactively support issuers who are “best actors” in terms of the priorities you wish to promote.

[Related: Women and Giving: Increasing the Happiness Quotient]

Fund change.

By choosing to invest in securities that have a stated purpose to address a need that is important to you for ethical or philosophical reasons, you can use impact investing best practices to put your capital to work to help find an appropriate solution.

You don’t necessarily have to sacrifice performance to integrate your values. By proactively supporting managers that prioritize your values or invest in a fun change product, you can achieve returns at least as good as, if not better than, the benchmark.

We integrate socially responsible investing for our clients that want exposure to this type of investment strategy. With your values and your advisor’s resources, you can assemble a portfolio that contains the potential positives of investing, while helping you feel good about the social impacts of your financial strategy.

Simple changes to how you invest can make a dramatic impact on both your financial life and the changes you want to see in the world.

[Related: Giving - Is It Part Of Your Plan?]


Julie Schmiel is an experienced financial advisor. She helps women and families manage their wealth portfolios.

Have more questions? Follow up with the expert herself.


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