You may want to be socially conscious and do the right thing, both in your own local community as well as in the larger global community. Perhaps you are concerned about issues such as fair trade and human rights, or maybe you are concerned about protecting wildlife and the environment, or passionate about diversity and inequality. Whatever your area of interest and moral or ethical position, you may want to act in a way that is in accordance with your personal beliefs and convictions. But at the same time, you may be interested in making money in the financial markets. Many see this as an irreconcilable impasse, but it doesn’t have to be, thanks to many investment vehicles that have been created in recent years to specifically cater to the needs of people who want to invest in the market without compromising their own personal values.
Mutual funds and ETFs are a great way to delve into the socially conscious side of Wall Street. These are not single stocks or bonds, but groups of stocks or bonds that are managed by trained professionals. When you buy a share in a mutual fund or ETF, you are essentially contributing funds to a fund, and then the fund’s manager will use that money to buy assets that he or she thinks will do well and meet the goals of the fund’s investors. Because these funds value diversity of assets, they are somewhat protected from the risk of only owning assets of an isolated company. And these days there are many fund companies and investment vehicles that specialize in socially conscious investing. When you buy into their funds, they promise to use your money only for investment in companies that promote the things you believe in, so you get two benefits. The first is that you get the peace of mind of knowing that your financial investments are for good causes. The second is that you get to promote your causes and support the companies that share your values, by putting your hard-earned money behind your commitment to those values. When get to own assets in companies that are trying to succeed by doing the kinds of things you want to see done in the world, so you have a chance to reap both financial rewards and personal satisfaction.
You can also buy stocks and bonds in individual companies, by doing some background research to find out which ones meet your standards. For example, if you want to help protect the environment from companies that pollute, you could buy stock in companies that make “green” products like alternative fuels that don’t contaminate the atmosphere. Or you can invest in companies that clean up oil spills, plant trees, manufacture biodegradable consumer products, or produce renewable green energy.
The idea is that you can have your cake and eat it too. It is possible to make money in the stock market and at the same time remain committed to socially conscious values, by putting your money into the right financial assets.
To learn more, talk to a knowledgeable financial advisor, especially one that specializes in socially responsible investing and/or in the Environmental, Social, and Corporate Governance (“ESG”) investment framework, and ask for a list of financial products that fit your criteria.