When it comes to investing, there’s more than just stocks and bonds. There are many ways for investors to put their money to work while maintaining social consciousness and being aware of how their investments align with their personal values.
Socially conscious investing is a type of investment that incorporates social responsibility into your portfolio. This type of investing may not be right for everyone, but if you’re looking to support a cause or address injustice through your investments, you may find that socially conscious investing meets those needs.
This blog post will cover everything you need to know about social consciousness in investing and why it might be right for you.
What is Socially Conscious Investing?
Socially conscious investing (SCI) integrates social responsibility into your investment decisions and portfolio. Investors who practice socially conscious investing make conscious decisions about where to invest their money to support causes and address injustices.
Socially conscious investors don’t just choose stocks or bonds; they carefully select which companies or industries to invest in and how to invest.
Socially conscious investing is often used to support social change or address issues such as discrimination, pollution, climate change, or gender inequality.
Types of Socially Responsible Investing
Impact Investing
Impact investing is an investment strategy that makes money in two ways: first, by generating financial returns as in any other investment, and second by creating social or environmental impact.
Impact investing is a growing movement that seeks to change society by addressing social and environmental issues through investment.
Socially Responsible Mutual Funds
Mutual funds, including a closed end interval fund, are a collective investment that allows people to pool their money together to make more significant investments that they would not be able to make on their own.
Many mutual funds now include a social or environmental component in the fund. This might mean that the fund excludes companies involved in tobacco, alcohol, or weapons, for example.
It might also mean that the fund includes stocks of companies involved in renewable energy or with a strong track record of hiring women.
Impact Bonds
Governments, companies, and nonprofits issue Impact Bonds to fund a specific project.
A good example is a solar energy project where a large group of people gets together to help fund the project. The company or government then issues bonds to pay the investors with interest.
Steps to Make Socially Responsible Investments
Do Your Research
Before you get into social consciousness in regards to investing, you need to do your research and find out which companies are socially responsible. There are many websites and tools that can help you to identify the top socially responsible companies.
Choose a Socially Responsible Fund
If you’re ready to start choosing specific companies to invest in, we recommend that you start by choosing a socially responsible mutual fund. These funds contain stocks of companies in a variety of industries and make it easy for you to invest with just one fund.
The Bottom Line
The truth is that we can all make a difference in the world. Social consciousness in investing is a great way to do this and can also be financially beneficial. If you’re interested in investing in socially conscious, start by doing your research and finding out which companies are socially responsible. Once you’ve done that, you can choose the best investment method.
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