Sustainable and Responsible Investing 101

What is Sustainable and Responsible Investing?

Just like “what is traditional investing,” there is no single answer to the question “what is sustainable and responsible investing.”   There are numerous types of both traditional and sustainable and responsible investing, (SRI). You may also hear the terms, "impact investing," ESG, or "socially responsible investing".

SRI considers not just opportunities for financial return but also opportunities for promoting the social good.  Through investing in local communities and through shareholder activism, SRI helps foster environmental progress, consumer safety, human rights, fair labor practices, responsible corporate governance, women’s empowerment, and workplace diversity.  And of course, many sustainable and responsible investors are motivated by their religious beliefs.

So SRI can involve investing in a multinational high tech company that is reducing its carbon footprint and is a leader in promoting workplace diversity.  But through SRI, a loan can be made to a not for profit in your community that offers job training or provides after school enrichment programs to disadvantaged youth. 

What sort of returns could I expect from a SRI portfolio?

First, past performance does not determine future returns. But nevertheless, there is a growing body of research showing that sustainable investing can produce returns that are comparable or superior to traditional investing. As the highly respected independent research firm Morningstar concluded in its 2016 review of the topic, sustainable investing "can lead to better risk adjusted performance at the portfolio level."

So if you are at all curious about learning more, we are happy to review your current portfolio.  We can evaluate your portfolio’s strengths, any weaknesses, and its level of risk. We would then review with you a portfolio that would more closely match your beliefs while still providing comparable opportunities for growth. And of course, we would make sure your investments are part of a larger, comprehensive financial plan.

If I am not seeking assistance managing my assets, should I contact Green Eagle?

Even if we do not manage your assets, we could help you develop a financial plan to help you achieve your financial goals. And if you have a workplace retirement plan, 401(k)/403(b), we can work with you and your employer to insure that your plan offers a choice of low cost traditional and sustainable fund options. 

Other ways you can make a difference include discussing with your place of worship or any groups you may be involved with the possibility of hosting a talk on how how sustainable investing can have a positive environmental and social impact.  We are happy to talk to you further and please feel free to contact us at info@GreenEagleFinancial.com