Socially responsible investing



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Socially responsible investing is based on the concept that corporate social responsibility, ethical concerns and measures to be taken into account while investing. It looks at a broader perspective, i.e. the investor’s point of view and the impact on the society as a result of that investment. Socially responsible investing aims to improve the whole environment and the society. See Also Green Investing

 

The amount of investment under this type of investing has been growing in size and it now compasses around $3.07 trillion in total assets. Since 2007 the growth rate has been more than 13 percent which should be applauded. One out of nine dollars in the United States under professional management is attributed to socially responsible investing. There are 3 approaches to socially responsible investing which investors may utilize described below briefly:

Screening is done to evaluate the investment portfolio or mutual funds and the criteria for evaluation are based on strong corporate social responsibility, good and ethical corporate governance criteria. The idea is to avoid poor performers which do not benefit the society in any way. Social investors search for profitable companies that can make positive contribution to the whole society. They also take into account other things such as safe products for consumption, healthy environmental practices and whether the company respects human rights and treats its employees fairly.
The second is shareholder advocacy in which socially responsible investors play an active role as the owners of corporate America.  It also involves shareholder resolutions on such issues that benefit the environment as a whole. Resolutions are then presented to the owners for their vote.

Finally community investing takes capital from investors and directs it to the underprivileged and underserved communities. This is so far the fastest growing area of socially responsible investing

In Canada

While it varies what is considered "responsible" many Canadian investors have steered clear of the oil sands developments for their damage to the environment and the landscape at large.