Sustainable Investing

Socially responsible investing is also known as sustainable investing . It refers to investments made in the clean energy sectors, environment issues, or some other field pertaining to social good. Also known as green investment, it is the values-based or ethical investment that takes in to account the social as well as the environmental factors.

Methods of Achieving Sustainable Investing

Since its religious and social origins, sustainable investing has come a along way. It is being looked at from a broader perspective, both, from the point of view of the investor as well as the society. Following are the five ways that help the social investors maximize their profits as well as the social good while making sustainable investments:

Screening: This step involves a thorough study of all the available options. It is the filtering process that involves separating out the profitable securities out of the whole lot.

Negative screening: The second step is to cancel out the companies that the individual would not invest in. These could be the ones engaged in tobacco products, beer manufacturing or the ones that harm the environment in some way. It helps you get a clear idea of which all companies you are not supposed to consider at all.

Inclusionary screening: This step moves on to add and not subtract. The companies with a good track record in areas like environment, employee relations and diversity could be included. These days the companies are accessed to find out their sustainability in terms of profit and the social and environmental presence that they have gained via their ethical business.

Divestiture: Divesting means removing some selected investments out of a portfolio. The basis of this exclusion could be social or environmental. However, you must not forget that there are costs attached to inclusion and exclusion of companies in the portfolio.

Shareholder activism: A shareholder activist is the individual who tries to bring about some change or pressurize the management to think in a particular direction. He could join hands with other shareholders and force the management to take up more socially and environmentally responsible course of action.

Thus one can understand that SRI is a very large segment today. It has moved places and there is still a lot to come. There are several companies coming up with new investment applications and plans in the sector of social investing. The concept of socially responsible investing is not just a morally fueled concept but it is a field that is actually inviting big bucks continuously. Therefore, it can be said that sustainable investing is here to stay and do a lot of good to the individual as well as the society.