Socially responsible investing refers to any investment aimed at bettering the world as a whole. In general, these investments can take the form of either environmental or social improvement. While this may seem like a limiting factor, the options for socially responsible investing are extremely varied and serve a wide range of purposes. The key factor in choosing the socially responsible investing option for you is the type of return you're seeking. Are you more concerned about a decent financial return, or will you sacrifice earnings for a worthy cause? Either option serves as an excellent form of "putting your money where your mouth is" in the ongoing quest for a better world.
Social investing for environmental purposes can often bring a nice financial return on investment, as well as further development in recycling, alternative energy, emissions control or other environmentally friendly industrial pursuits. Consider lending to businesses that intend to develop green forms of energy or that are working to upgrade to more efficient buildings or equipment. Businesses that actively promote proper husbandry of natural resources and the preservation of wildlife and their habitats may also be a consideration.
Investing in social improvement
Throughout the world, poverty and scarcity still prevail. No matter where you are, there are some people who do not live as well as others around them. For some, it may be a matter of needing a sustainable income with which to improve their standard of living, send their kids to college, or make other similar advancements. In other cases, people may be without the simplest necessities of life: food, water and shelter. While investments that are aimed at social improvement often don't have a very good financial return, they do have a profound impact on the lives of the people involved.
Social improvement investments may include low-interest or no-interest loans for starting businesses in impoverished areas. On the other hand, social investing may be geared toward drilling wells, building houses or teaching growing techniques that will increase the food production in deprived areas. For higher monetary return, your social improvement investments might be aimed at companies that practice fair employment practices or offer substantial benefits to employees, and avoid those that are known to use child labor or poor working conditions.