Hi Everyone! I hope you’re all enjoying your September. It is alllllllmost officially Fall; only two days left to go! Although for me, once it hits September, it’s usually Fall in my mind. This year has been super weird though – the summer was unseasonably cool so it felt like Fall pretty early, but then for the past week and a half or so, it’s been in the 80s and kind of humid too! At the same time the leaves have already started to turn (they started in August!) and fall, so things feel a little mixed up weather-wise around here.This past weekend I worked on my #lendahand mission – part of my overall #Sustainable Living Challenge (you can read about that here and here if you missed it). On Saturday I spent the morning at the dog shelter where our latest foster pup got adopted – pretty much immediately after they opened – and we got a new foster pup to watch after. It’s always a little bittersweet for me. I loved our last foster so much – she was SO cute and had such a quirky personality – but she went to a great home. It feels great to know that we’re helping animals find their forever homes, but it’s hard to not get attached in the meantime!
I also spent some time this weekend thinking about more serious things like life goals, specifically my finances. I remember when I graduated college, there was an assembly line type system set up in the campus center. Several tables were organized in a row so students could walk down the line and grab their cap and gown, instructions for graduation day, and other university swag. One of the things I distinctly remember getting shoved into my hand was a small paperback book. I couldn’t tell you what the title was, or even who wrote it, but that book was probably one of the most useful things I got that day. I didn’t even read it until about six months after graduation.
Once I finally opened it, I discovered that this little book had all kinds of useful information on the life things you don’t learn in college, most importantly financial planning. Before then, I had some basic understanding of compound interest (it was a good thing) and the stock market (it existed) and retirement (eventually I’ll get there and will need money). Beyond that I was pretty clueless. This book gave me my first steps to understanding investments and got me thinking about my future.
This brings me to the topic of socially responsible investing or SRI. SRI is a way for people to invest in companies that align with their values and beliefs.
Socially responsible investing (SRI) is an approach to investing that reduces exposure to companies that are deemed to have a negative social impact—e.g., companies that profit from poor labor standards or environmental devastation—while increasing exposure to companies that are deemed to have a positive social impact—e.g., companies that foster inclusive workplaces or commit to environmentally sustainable practices.
Alex Benke, CFP
For a long time I have been interested in SRI; I do my best to “vote with my dollar” when I make purchases, but the idea of supporting sustainably-minded companies with my investments only furthers that concept. I want to support these companies in any way I can, and apparently I’m not alone. According to a Kiplinger article, one-third of millennials consider SRI factors when they invest. In addition, assets invested using SRI strategies have seen a 76% jump in just two years (according to the same article).
At the same time, it is overwhelming to me to create my own SRI portfolio by picking each specific socially/environmentally responsible company (not to mention, keeping up with their practices to make sure they continuously align with my values). I’m sure people do this, but I don’t feel confident enough in my investing skills to manage that. More investment companies are jumping on the SRI bandwagon though and have started to offer mutual funds and exchange-traded funds that are specifically geared toward SRI. I can’t speak to all investment companies, so you may have to do some research to see if your existing account/company offers an SRI portfolio. I have also provided some information below (the Additional Resources section) if you’re interested in looking into those further or want some recommendations for your existing accounts.
If you are looking to set up an account, the company I use and have been very pleased with is Betterment. About a year ago, after doing a TON of research, I decided to open an account with Betterment to dip my toe into non-retirement investing (although you can do retirement savings through their website if that’s what you’re looking for). They are a robo-investor company that got excellent reviews on third party sites, and checked all the boxes I was looking for at the time (low fees, low entry point, very automated, and had an intuitive interface). I like that their SRI option is as easy to set up as their traditional portfolio so there isn’t a lot of extra work or effort to make this choice. I also like how I can VERY easily see how the account is performing and what kind of growth it’s getting. I have other accounts that don’t lay this out as clearly and it can be frustrating. Also – because this is something I wanted to know: I only opened this SRI account recently, but from my experience thus far, this account is receiving comparable growth to my non-SRI accounts, so it’s a win-win!
Whichever path you take, the next time you are reviewing your financial plans, I highly suggest taking a moment to see if there are any SRI avenues for you to pursue. If you have strong beliefs about social responsibility, these accounts help support companies that follow those values in a very traditional marketplace (where they directly compete with other non-socailly responsible companies). For me, it is a great way to make sure I’m taking care of myself financially, while also supporting companies committed to sustainable practices.
This post contains affiliate links
- 7 Great Socially Responsible Mutual Funds
- 6 Vanguard Funds That Are Socially Responsible
- Morgan Stanley Institute for Sustainable Investing