Ways of Practicing Socially Responsible Investing

Ways of Practicing Socially Responsible Investing

To invest with a focus on social responsibility, people need to develop a strategy intended to influence social change. Investors still consider financial gains when making decisions, but also consider the impact of decisions on society at large. Investing in a natural gas pipeline, for example, may result in large profit, but will also place lives at risk, destroy wildlife habitat, and deplete natural resources.

Placing investment dollars into solar energy instead may also result in large profit without the devastating side effects. Solar energy investments also influence the market and will encourage more investing in sustainable energy. France and China are just two countries that have drastically increased their use of solar power. Those who invested in relevant companies prior to that boom saw high returns on their investments.

Wind energy is also a socially responsible investment. Investors can select companies that manufacture turbines, technology, or other components required to construct and operate wind farms. There are even community wind farms in which to invest. The opportunities to make smart investments with low risks are also prevalent in sustainable energy companies. Companies and suppliers that operate on the fringes of wind energy offer lower risks because they are not completely reliant on the industry for contracts. Technical advisors, for example, have a role in the industry, but work in other industries as well.

While turbine manufacturing may be the first investment idea that comes to mind, other companies connected with wind energy also have the potential to provide substantial gains. Examples include installation contractors, rail and road transporters of materials, equipment, and turbine components, transmission companies, and distribution companies. There are many sites online dedicated to suggestions and advice regarding energy investing so investors can investigate here for more possibilities and ideas.

Investing responsibly can also include limiting investments to companies that develop environmentally-friendly policies and procedures. Selecting companies that promote diversity, provide safe conditions for employees, and pay fair wages are also ways to influence social change. Many socially responsible investors choose to exclude tobacco companies, chemical companies, or defense contractors from their portfolios. There are no specific rules to investing responsibility so investors have to establish those guidelines for themselves.

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