Eco-consciousness is an important consideration today and that trend has made its way into investor choices, as well. Even robo-advisors have responded to consumer demand for socially responsible investing (SRI). What exactly does that mean?
SRI clients want to know that the businesses they invest in represent areas like clean energy or social justice as opposed to tobacco, petroleum, or weapons companies. Ethical or green investing seeks to maximize wealth while supporting sustainable, socially responsible change.
Who are the clients that seek green investing options? While it is more prevalent with millennials, anyone that wants to feel that they are taking responsibility in supporting only businesses who support the greater good of people and the environment. Socially responsible investing includes environmental, social and corporate governance considerations.
Environmental, Social and Governance (ESG )
Returns alone are not enough to tempt today’s shareholder. The three-pronged approach can help allow investors to delve deeper into the practices of the corporations that they seek to profit from. Examples are:
- Environmental: water conservation and clean technology.
- Social: labor relations, diversity and anti-bias practices
- Governance: corporate political affiliations and contributions
To learn more about socially responsible investing contact a financial advisor today.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.