Broker Check
Investing for good!

Investing for good!

May 10, 2017
Share |

Investing in companies that follow socially responsible practices (SRI) has been viewed skeptically in some investment circles.These companies follow policies to reduce or eliminate negative effects on the environment, are transparent and ethical in their business practices and support diversity and human rights for their employees, vendors and community. But doing good costs money, right?

Investors were warned to expect lower returns with SRI than with a broader investment strategy. These companies couldn't possibly be as profitable as the cold-hearted corporations ripping off the public and polluting our environment! That perception is changing as a new study by Barclays shows that companies following progressive ideals can outperform the overall market.

Barclays - Sustainable Investing and Bond returns

And Morningstar recently reviewed and compared numerous in-depth studies on the returns of investments following SRI principles.

Morningstar Dispels Myth of SRI Underperformance

According to Morningstar, "More than 1,000 asset managers have signed the Principles of Responsible Investment, backed by the United Nations, which commits them to including sustainable standards in their investment process."  Unfortunately, mutual funds following a sustainable investment model comprise only 1-2% of the market.  

A fee-only financial planner can help you identify appropriate sustainable investments to use in your own portfolio. Contact us for a free consultation if you'd like to implement this strategy.  We work with clients in the great Los Angeles area and across Southern California.