Deciding on an investment that is based on personal values and financial consideration is not a new concept in the financial world. However, there was once an idea that was considered so left-field no one believed it would hold any traction. However, it has become one of the most popular investing approaches. More people are concerned with choosing opportunities that are now known as Sustainable and Responsible Investing or SRI. Many accountants in London are offering up this investment opportunity to their clients.
This is a concept that been brewing and developing over the past decade. At one point the focus of SRI was to screen out various companies and corporations that might have been involved in the tobacco industry or defense contracting. While the financial prospects of a company were important they played a secondary role to the values and morals a company held.
In today’s world, there is a widespread belief that companies that are focused on environmental and social ideas will be more profitable in the long run. Individuals who focus on SRI are seeking companies that are positioning themselves for success by offering a socially responsible approach. This is an excellent opportunity for individuals who are looking to fill their portfolio with companies that are driven by values as opposed to greed.
How To Approach Good Investing
One of the main elements in good investing is to decide what suits your own preferences. Some basic ways to approach this investing are the following:
– Avoiding specific investments because they may be referred to as “sin” stocks, which typically consist of gambling, tobacco, and alcohol. This can also include companies that are involved in defense contracts and those that have a negative effect on the environment.
– Look for companies that are trying to promote a specific cause. This may be a large cause like looking out for the overall health of the planet. While other companies may promote specific social stances such as women’s rights.
– Another option is to look into specific industries that address long-term issues such as renewable energy and proper water usage.
While you may have an interest in a specific cause it does not mean that you have to compromise your financial objectives. The most effective SRI strategies are those that take into consideration the financial objectives of the company along with their general ethics and causes. The basic premise of SRI is finding a cause that you believe in that will help you make a profit while achieving long-term financial goals. These investments give you a sense that your finances are doing a greater good as well, which is important to many people.
How To Pursue Your Own SRI
You do not have to be limited to stocks or other investments to be socially responsible. There are mutual funds that offer unique approaches to responsible and sustainable investing.
Many of these stock mutual funds center around the specific actions of many companies. You can also look into bond funds that are used to invest in debt issued by corporations and governments and are aimed are creating positive social and environmental development.
If you have a pension plan at work, you may be able to achieve SRO approaches within its portfolio. You may also consider a direct investment in community-based organizations that use the funds to pursue its goals and will pay investors a return over time. You can talk to accountants in London for more specific ways of aligning your funds with SRO involvement for achieving your financial goals.