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Types of Socially Responsible InvestingThere are three basic ways to integrate one’s ethics with one’s investing decisions:
Shareholder activism attempts to, ‘directly pressure corporations to improve their performance in certain specific areas’ (Kinder 7). Shareholder activism specifically involves talking with corporate management, letter writing campaigns, attending annual stockholder meetings, and filing shareholder proposals or resolutions (Equality). The goal is to either get ride of negative corporate behavior and or positively direct the future of a corporation from within (Kinder 7). Guideline portfolio investing, on the other hand, attempts to create change through the market as a whole, instead of working within individual corporations. This is done by, ‘managing stock and bond portfolios within social constraints’ (Kinder 7). In other words the stocks and bonds within a portfolio must meet some predetermined criteria. For example, in a stock portfolio this might translate into not investing in any companies that acquires 10% or more of their earnings form the production and or sale of military weapons. Community development and alternative investing works differently than the previous two methods. This investing strategy is aimed at addressing broader societal issues. Instead of working to change the economic market, community development and alternative investing focuses on channeling money to areas of society that have been left out of the market. This might include projects involved with providing shelter, food, and capital to the economically disadvantaged or funding research to develop more economically viable renewable energy options (Kinder 7). All of these strategies listed above can, and are, used in a complimentary fashion in order to integrate economic decisions making and ethics. |