Impact Investing (SRI)

Community investing, impact investing, Podcast, shareholder advocacy, socially responsible investing, SRI

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Unlocking the Power of Sustainable, Responsible, Impact Investments (SRI)

Your Guide to Shaping the World Through Your Investments

Introduction Sustainable, Responsible, Impact Investments (SRI): A term that’s been rapidly gaining ground in the world of finance. But what exactly is it, and why is it taking the investment world by storm? In this blog, we’re going to explore the fascinating world of SRI, uncovering its growth, motivations, and the various degrees of SRI involvement.

1. What is SRI?

• SRI: Shaping the World Through Your Investments
  SRI empowers you to vote with your investments, influencing the world according to your values. It’s a thriving investment sector, surpassing the overall growth rate of general investments.
• Investing with Purpose
  SRI aligns your investments with your values and offers a means to address pressing issues like global warming and campaign finance reform.
• Degrees of SRI Involvement
  SRI can range from using credit unions instead of profit-driven banks to investing in SRI index funds or active mutual funds with a focus on community investing and shareholder advocacy.

2. Other Names for SRI and How to Invest

• SRI by Any Other Name
  SRI goes by various names: Socially Responsible Investing, ESG Investing, Sustainable Investing, and more.
• Investment Options
  Explore SRI with individual stocks, SRI mutual funds, SRI ETFs, community development loan funds, managed accounts, and alternative investments.

3. Growth of SRI

• SRI: A Rising Star
  SRI has soared over the past two decades, with around $17 trillion in assets managed with ESG criteria in the US.
• Reasons Behind the Rise
  More availability, improved SRI fund performance, and a heightened awareness of issues like climate change have propelled the SRI movement.

4. Degrees of SRI

• Customizing Your Portfolio
  Understand the four types of SRI investors and the variety of portfolios they can create based on their values and priorities.

5. Motivation for SRI

• Avoiding Undesirable Companies
  Some investors choose SRI to avoid supporting certain companies that don’t align with their values, such as Exxon Mobil or Monsanto.
• A Political Tool
  SRI can be a means of influencing corporations on issues like climate change, corporate political spending, and executive compensation.
• Supporting Specific Causes
  Many SRI investors are passionate about particular issues and want to invest in ways that support their cause.

6. Three Major Components of SRI

• Screening
  SRI investors use positive and negative filters to choose investments, whether through individual stocks, SRI mutual funds, or SRI ETFs.
• Shareholder Advocacy
  Engaging with companies as shareholders by voting proxies and supporting resolutions aligned with your values.
• Community Investing
  Contributing to closing the wealth disparity by using member-owned credit unions or community investment notes.

7. Evaluating Investments

• No Load and I Class Funds
  A closer look at mutual funds vs. ETFs and the importance of the expense ratio.
• Performance and Ratings
  The significance of analyzing a fund’s performance and ratings when making investment decisions.

8. Steps to SRI

• Liquidity Needs
  The importance of maintaining a prudent reserve for unforeseen expenses and understanding your long-term spending plan.
• Risk Tolerance
  Evaluating your ability to handle investment volatility to avoid making hasty decisions.
• Diversification
  The role of diversification in risk reduction and portfolio performance.

9. Examples of Mutual Fund-ETF Investments

• SRI and Non-SRI Portfolios
  How to construct diversified portfolios using SRI and non-SRI investments tailored to your preferences.

10. VOTE

• Engine No1’s Unique Approach
  Explore VOTE, an SRI ETF that stands out by not screening its holdings, engaging with companies, and focusing on environmental issues.

11. Separately Managed Accounts

• Customized Portfolios with SMAs
  A detailed look at separately managed accounts provided by various companies specializing in SRI investment.

12. Example Portfolios

• Constructing a Diverse Portfolio
  Learn how to build diversified SRI portfolios using a combination of mutual funds, ETFs, individual stocks, and other assets.

13. Investing Mechanics

• Where to Invest
  Guidance on choosing a brokerage and considering transaction fees for your investments.
• Consideration if Looking for an Advisor
  The importance of understanding how financial advisors are compensated and why working with a fiduciary can be beneficial.

18. YourStake

• Evaluating Impact Investments
  Discover YourStake, a tool for assessing the impact of your portfolio and participating in shareholder advocacy.

19. First Affirmative – AffirmativESG

• A Network of SRI Experts
  Explore First Affirmative’s AffirmativESG platform, offering tailored accounts and a strong focus on shareholder advocacy.

20. Ethos

• Evaluating Investments with Impact
  Learn how Ethos allows you to evaluate portfolios and funds based on the UN Sustainability Goals, with a focus on the causes that matter to you.

21. OpenInvest

• Advisor-Managed SRI
  Discover OpenInvest’s asset management services for advisors, offering separately managed accounts and impact reporting for clients.

22. Morningstar Office

• Expanding Sustainability Factors
  Uncover Morningstar’s detailed evaluation of ESG criteria, offering insights into sustainability and engagement efforts.

23. CSRIC

• Professional Education in SRI
  Learn about the Chartered SRI Counselor (CSRIC™) certification, providing financial professionals with a foundation in SRI knowledge and best practices.

As we delve into the world of SRI, you’ll gain the tools and insights you need to invest with purpose, create a portfolio aligned with your values, and make a meaningful impact on the world. Join us on this journey of financial responsibility and sustainability.