We invest our money for many reasons. We may want to save for college, or retirement, or create wealth for ourselves and our heirs. Our reasons may be as varied as our individual personalities. Even more complex are the investment choices we make to accomplish our goals. These decisions encompass a combination of many factors such as our tolerance to risk, our need for liquidity, how many years until we need the funds, and so on.
Over the years a growing number of people have begun adding another dimension to their investment decisions - their personal values. Making investment decisions according to ethical as well as financial criteria is known as socially responsible investing.Investments can be screened for ethical considerations both negatively and positively. Negative screens focus on what companies don't do. They don't produce weapons or damage the environment, for example. Positive screens look for companies that make a contribution to society - perhaps they recycle, have progressive minority practices or reinvest in their local community. Many municipal bonds, for example, pass positive screens because they fund construction of schools, hospitals or their community's infrastructure. Socially responsible investors look at both negative and positive screens in making their investment choices.
The subject areas reviewed by professional screeners vary depending on their particular ethical criteria. These may include the environment, weapons production, product integrity, equal opportunity employment and investment in repressive regimes such as South Africa before the 1994 elections. Within a broad subject category, screeners may look for very specific information. The environment, for example, encopasses a host of issues such as acid rain, ozone depletion, global warming, toxic waste, solid waste disposal, nuclear energy and endangered or overexploited resources. |
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