Are YOU a Socially Responsible Investor?


Here at Finance Opinion, we’re always looking for ways to help readers diversify their finances through investments that align with their personal financial goals, as well as their values. So, when a reader recently wrote in asking about ways they can better incorporate sustainable and socially responsible investments to their portfolio, we got to work researching strategies.   

If you’re new to socially responsible investing, the term alone may feel daunting. But have no fear – from helping to explain what “socially responsible” investing means, to outlining ways you can get started today to incorporate more investments that align with your values, the Finance Opinion team breaks it all down for you in this post. 

Let’s get started!

What Socially Responsible Investing Means

Socially Responsible Investing (SRI) is an investment strategy that aims to generate both social change and financial returns for an investor. These strategies include investing in companies aiming to make a positive sustainable or social impact, such as renewable energy, and excluding investments in any company making a negative impact, such as fast-fashion.

Oftentimes, venture capitalists and investment firms refer to SRI investing as environmental, social and governance (ESG) investing. These investments are not driven by standard metrics (like performance), but instead by brand-alignment in core values and those making real change and working toward a positive impact in the key ESG areas. 

As an example, by divesting assets from companies that produce or sell addictive substances or activities (like alcohol, gambling, and tobacco) and reallocating those assets toward investing in companies engaged in social justice, environmental sustainability, and alternative energy/clean technology efforts, individuals and investment firms alike can shift their portfolio strategy to one that focuses on a cleaner, more equitable, and more sustainable future. 

How to Incorporate Socially Responsible Investing into Your Portfolio

  1. Determine what’s important to you

The first step in incorporating socially responsible investments to your personal finance portfolio is to determine what you consider most important when it comes to making the world a better place.

Here at Finance Opinion, we’re made up of a diverse set of writers, each with their own personal goals and values. This means what’s the top “socially responsible” mission to one, may be on the opposite set of the spectrum for another, and that’s okay!

Are you an advocate for solar power or organic brands? Would you be comfortable owning stock in a company that may be harming the environment, but has a majority-female board of directors?

Know your personal core values and deal-breakers before deciding on where to invest, and use these as deciding factors to ensure it’s going toward social and environmental causes you believe in.

2. Watch Out for Greenwashing

SRI/ESG strategies are on the rise, and unfortunately, some brands use this to their advantage despite not making any real change, which the industry has coined as “greenwashing.”

Greenwashing is when a brand conveys a false impression or provides misleading information about how their products are more environmentally sound. As such, greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company’s products are environmentally friendly.

A recent example of greenwashing is when ExxonMobil indicated they were reducing greenhouse gas emissions, when in fact they were actually increasing. Claims like this are common, which is why, as with any financial decision, it’s important to do your research before investing.

3. Look to the Experts

From sustainability to biodiversity and social justice, SRI covers a lot of ground. If investing isn’t your expertise, and/or you don’t have the time to allocate to thorough brand and industry research, you could end up supporting brands that don’t align to what you value as socially responsible.

Thankfully, there are financial advisors and experts that focus solely on sustainability and SRI strategies available to help. From consulting with you on your goals and values, to helping bolster your portfolio and investment allocations, a financial professional can help you incorporate sustainable and socially responsible investments to your portfolio with ease.

Have questions about socially responsible investments (or any financial topic!)? Write to our team in the comments – we reply to every question and just may feature it as our next blog post!  


The opinions expressed in this post are for informational purposes only. To determine the best financing for your personal circumstances and goals, we advise you to consult with a licensed advisor.

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