Financial Planning Tip of the Week- What is Socially Responsible Investing?

 

Image

By:Jennifer R. Figurelli, CTFA

Most people associate socially responsible investing as “going green”.   However, environmentally friendly investments represent only 1/3 of the total investment strategy.  Socially responsible investing analyzes not just environmental factors, but also social and governance factors.    Social factors include investing in companies that promote workforce diversity, ethical standards and community involvement.    Environmental factors consider a company’s pollution controls, energy efficiency, product safety and waste and energy use.   Finally, governance factors take into account a company’s accounting policies, compensation plans, political activities and concentrated board of directors.   These factors can have a material impact, either positive or negative, on a company’s brand image, costs of operation, relations with regulatory agencies, and ultimately, stock price.  

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s