Socially Responsible Investing
Environmental, Social, and Corporate Governance (ESG) Investing
Socially Responsible Investing (A brief introduction)
We are happy and excited to assist in aligning your investment needs with your personal values and societal concerns. As an investment adviser representative of Commonwealth Financial Network®, we offer a full range of socially responsible investing services, including the management of socially responsible portfolios for individuals, nonprofit organizations, foundations, and endowments.
What Is socially responsible investing?
Sustainable, responsible, and impact investing (SRI) is an investment discipline that considers environmental, social, and corporate governance criteria to generate long-term competitive financial returns and positive societal impact.
SRI assets in the United States: According to the US SIF Foundation’s 2018 Report on US Sustainable, Responsible and Impact Investing Trends, as of year-end 2017, more than one out of every four dollars under professional management in the United States—$12 trillion or more—was invested according to SRI strategies.
From 2016 to 2018, sustainable, responsible, and impact investing enjoyed a growth rate of more than 38 percent, increasing from $8.7 trillion in 2016. More than one out of every four dollars under professional management in the United States today—26% of the $46.6 trillion in total assets under management tracked by Cerulli Associates—is involved in SRI.
What strategies do sustainable and responsible investors use?
Traditionally, responsible investors have focused on one or both of two strategies. The first is ESG incorporation, the consideration of environmental, community, other societal and corporate governance criteria in investment analysis and portfolio construction across a range of asset classes. An important segment, community investing, seeks explicitly to finance projects or institutions that will serve poor and underserved communities in the United States and overseas. The second strategy, for those with shares in publicly traded companies, is filing shareholder resolutions and practicing other forms of shareholder engagement. Sustainable investing strategies work together to encourage responsible business practices and to allocate capital for social and environmental benefit across the economy.
As a result of its investment strategies, SRI also works to enhance the bottom lines of the companies in question and, in so doing, delivers more long-term wealth to shareholders. In addition, socially responsible investors seek to build wealth in underserved communities worldwide. With SRI, investors can put their money to work to build a more sustainable world while earning competitive returns both today and over time.
Socially responsible investors include individuals and also institutions, such as corporations, universities, hospitals, foundations, insurance companies, public and private pension funds, nonprofit organizations, and religious institutions. Institutional investors represent the largest and fastest-growing segment of the SRI world*.
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*2018 Report on Sustainable and Responsible Investing Trends in the United States, www.ussif.org
Investing in the stock market involves gains and losses and may not be suitable for all investors. The investment’s socially responsible focus may limit the investment options available to the investment and may result in returns lower than those from investments not subject to such investment considerations.