The environment—Some investors want to exclude fossil fuel companies – like oil and gas producers - from their portfolios, or companies whose operations leave a profound environmental footprint, like plastics, paper products, or fast food. At the same time, investors may want to include companies whose operations are designed to mitigate environmental impact, such as those in water and waste reclamation, alternative power sources, such as water, wind and biofuels.
Social issues—This area encompasses a broad range of issues; from human rights to armed conflict, racial discrimination, sexual identity, gender equity, poverty, firearms, tobacco products, alcohol, prison reform, and animal welfare, among others.
Investors may opt to exclude the stocks of firearms manufacturers or distributors, factory farms, or tobacco producers, but include companies with strong records on human rights, or those who produce life-enhancing products and services, such as organic foods or tools to improve health and wellness.
Governance practices—Within the same economic sector, investors may favor companies who score higher marks on governance matters. That’s because companies with strong, ethical, and diverse leadership at the executive and board levels are viewed as more likely to retain long-term shareowner value. They tend to be more forward-thinking and more progressive, and therefore less likely to be the target of lawsuits or discrimination claims, and better able to attract and retain top talent.
Today, SRI is growing faster than any other investment movement and investors now have many choices when it comes to SRI investments.
First Affirmative can help investors understand the full ESG profile of any company, fund, or ETF, and create a custom portfolio aligned with the investors’ financial goals, and their values. Contact us to get started.