Most people live their lives based on a set of values they consider to be important; values that drive the majority of their decisions. At EKS Associates, we strive to understand the values held by our clients, as they form the basis of the comprehensive financial and investment plans we develop for them. For clients who emphasize the importance of incorporating their personal values and societal concerns into their investment philosophy and decisions, we introduce Socially Responsible Investing (SRI).
SRI is not a new concept and has gone by many names through the years:
- Values-Based investing;
- Ethical investing;
- Green investing;
- Environmental, Social, Governance (ESG) investing; and most recently,
- Sustainable and Responsible Impact investing.
Developing a socially responsible portfolio considers the environmental and social consequences of investments, both positive and negative, within the context of rigorous financial analysis. Decisions are often based on choosing personal causes, such as faith-based initiatives, environmental concerns, and social values, as well as addressing beliefs about issues like corporate governance, community development, and shareholder advocacy, to name a few. The SRI model also excludes certain investments that conflict with one’s values.
The goal of SRI investments is the same as other investments: appreciation, capital gains, and preservation of capital. SRI investing, therefore, identifies businesses that represent sustainable, responsible, and financially-sound investments that will meet the financial goals of the individual.
There are many myths surrounding Socially Responsible Investing that often deter people from pursuing this strategy. Read “Debunking Socially Responsible Investing Myths” to learn some of the facts. It is indeed possible to align your investment strategy with your personal values and financial goals, without sacrificing returns.
A strong advocate of socially-responsible, values-driven investing, EKS’ Darren Zagarola, CFP®, CPA, PFS, has authored many articles and appeared on various TV and radio financial programs about this topic over the last few years. Read Darren’s informative articles about Socially Responsible Investing or contact him to learn how you can make a difference in the world by more conscientiously choosing where and how to invest.