Build Your Portfolio Around Socially Responsible Investments
Socially responsible investing is an investment strategy that seeks to maximize both financial return and social good. Simply put: you invest in companies that are aligned with your core values.
At Jeffrey M. Goldfarb & Associates, we can design and build a custom financial portfolio focused in whole, or in part, on socially responsible investment opportunities. From green securities to community investing, we can help ensure you reach your financial planning goals, while making an impact beyond you and your family.
What is Socially Responsible Investing? Albert Einstein famously remarked “We can’t solve problems by using the same kind of thinking we used when we created them.” To some extent the answer to today’s problems is to adopt a new approach to investing. We are trying to make positive headway towards socially responsible investing. Socially Responsible Investing (SRI) is a pragmatic approach to invest in good corporate citizens (companies), which are driven by their responsibilities not only towards society but also the environment, the community, and corporate governance. It precisely means integrating social, environmental and governance issues into investment decisions and by investing in these companies we are trying to be a part of their success as well as reiterate our commitment to the world in which we live.
Why employ it? Many studies have been done (from John Guerard Jr. in 1995, to Hebner, Brenson, and Stark 2011) to compare the results of SRI screened vs. unscreened performance. The conclusions are that there are virtually no differences between one approach or the other in terms of long term performance. The determining factors are selection, timing, allocation, and skill. Based on these research results, it opens the door for investing based on one’s values without potentially compromising results.
How we do it: In monitoring these companies, we use independent research sources to screen the companies for various attributes such as climate/clean technology, environmental issues, community development, diversity, human rights, and board governance issues. We will not invest in manufacturers of alcohol, tobacco, or weapons products. Since most people have different values within a broad context, Socially Responsible Investing allows portfolios to be constructed mirroring the values and beliefs of the individual investor.
According to a report by Social Investment Forum, “At the start of 2010, professionally managed assets following SRI strategies stood at $3.07 trillion, a rise of more than 380 percent from $639 billion in 1995.” This shows that there has been a steady growth in the professionally managed assets following SRI strategies and we believe that this is a step in right direction.
