What is socially responsible investing?

Posted on January 1, 2019 in Ethical Investing

Socially responsible investing considers its impact on the wider world. It integrates environmental, social and governance (ESG) factors into its decision-making processes to ensure that no investment supports potentially damaging industries. Responsible investing pays attention to a range of issues such as climate change, water management, workplace management, ethical innovation, employee diversity, human rights and labour policies and practice. Socially responsible investing is not philanthropy. While it’s concerned with protecting society and the environment from further harm, its simultaneous goal is to build wealth.

The importance of ethical wealth management

Our planet is experiencing worrying environmental and social pressures.Many argue that the future of humankind hangs in precarious balance. Our next steps and decisions will determine which way the scales tilt and that is pushing many people to think carefully about their choices, including how they invest. A focus on socially responsible funds means we can contribute positively to our world – while also benefiting financially.

How does it work?

There are two approaches to building an ethical investment portfolio: positive and negative screening. Negative screening identifies industries to avoid such as such as the arms trade, the gambling industry, and the tobacco and alcohol sectors.

Positive screening is an increasingly popular method of ethical investing and seeks out companies that exhibit good values and are actively improving the world around them. These socially responsible investment funds often include companies from the healthcare, education and renewable energy sectors.

We’ve built a useful tool which will help you decide whether ethical investing is right for you. If you’d like to invest responsibly, you can then fill in the short application. Once your account is funded, you can log in from anywhere, at any time, on any device to view a full breakdown of the investment activity. These portfolios are managed by award-winning FCA-regulated discretionary investment manager, TAM Asset Management Ltd.

Greenfinch ethical portfolios

Greenfinch offers a range of environmental, social and sustainable investment portfolios that are designed to make a positive difference to the world we live in – without compromising our clients’ wealth.

Greenfinch focuses on funds that invest in companies which uphold international human rights and have a positive impact on society. In terms of the environment, Greenfinch targets environmentally aware companies that are working hard to manage their impact through innovation, research and policy. When it comes to sustainability, Greenfinch invests in companies that embrace accuracy and transparency in their accounting methods, excluding funds that may invest in companies that operate unethically in any way or engage in illegal behaviour.

Your choice of portfolio depends on how much risk you feel comfortable taking and the returns you’re aiming for. Each performs differently (check out the growth statistics here), with the choice of how you want to invest in your hands. To find out more about socially responsible investing and how we can help, contact us today.