Socially Responsible Investing Gains Ground as Investors Seek Societal Benefits as Well as Financial Returns
Faced with global problems like climate change and poverty, more investors are considering the social and environmental results of their investments. Socially responsible investing has become a fast-growing part of the investment industry. As of early 2007, over $2 trillion dollars were invested using socially responsible methods. This represents about 9% of all money invested by professional fund managers.
One of the easiest and most popular ways to invest is through socially responsible mutual funds. A mutual fund accepts from a large pool of investors to buy different securities. Mutual fund supervisors can use socially responsible methods to identify which investments to buy. Through a selection process known as screening, fund managers may buy only stocks of companies that meet the requirements set out by the fund.
The most commonly screened stocks are related to companies that make cigarettes, which cause many serious diseases and lead to billions of dollars in health costs. Or, a fund may choose to invest only in companies that adjust their business practices to help to protect the environment, for example by reducing their carbon emissions to help slow global warming.
Shareholder advocacy is another form of socially responsible investing. Shareholders may decide to sell the stocks of companies that do not share their social values. One of the best-known examples was the movement to divest, or stop investing, in companies that did business in South Africa under apartheid, a program of racial separation that has since been dismantled.
Community investing is the most direct and local form of social investing. This means providing credit or investing in businesses in a local community.
Today, about half of American families own stock in some form. And more people are considering the effect their investments have. This has caused some companies to consider social issues as well as business plans when formulating their corporate strategies.
Companies that pursue socially responsible practices can see a strong boost to their reputation and public image. For example, a recent public opinion study by Harris Interactive and the Wall Street Journal asked people what they thought were the best and worst American companies. The poll found that software maker Microsoft was ranked as the best company.
One of the main reasons for this high ranking was the charitable activity of the company's chairman, Bill Gates, through the Bill and Melinda Gates Foundation. The Foundation has given billions of dollars to organizations around the world to support health care and education, and in the process has helped improve Microsoft's corporate image as well.
Source:
VOA News
One of the easiest and most popular ways to invest is through socially responsible mutual funds. A mutual fund accepts from a large pool of investors to buy different securities. Mutual fund supervisors can use socially responsible methods to identify which investments to buy. Through a selection process known as screening, fund managers may buy only stocks of companies that meet the requirements set out by the fund.
The most commonly screened stocks are related to companies that make cigarettes, which cause many serious diseases and lead to billions of dollars in health costs. Or, a fund may choose to invest only in companies that adjust their business practices to help to protect the environment, for example by reducing their carbon emissions to help slow global warming.
Shareholder advocacy is another form of socially responsible investing. Shareholders may decide to sell the stocks of companies that do not share their social values. One of the best-known examples was the movement to divest, or stop investing, in companies that did business in South Africa under apartheid, a program of racial separation that has since been dismantled.
Community investing is the most direct and local form of social investing. This means providing credit or investing in businesses in a local community.
Today, about half of American families own stock in some form. And more people are considering the effect their investments have. This has caused some companies to consider social issues as well as business plans when formulating their corporate strategies.
Companies that pursue socially responsible practices can see a strong boost to their reputation and public image. For example, a recent public opinion study by Harris Interactive and the Wall Street Journal asked people what they thought were the best and worst American companies. The poll found that software maker Microsoft was ranked as the best company.
One of the main reasons for this high ranking was the charitable activity of the company's chairman, Bill Gates, through the Bill and Melinda Gates Foundation. The Foundation has given billions of dollars to organizations around the world to support health care and education, and in the process has helped improve Microsoft's corporate image as well.
Source:
VOA News
Labels: mutual funds, shareholder advocacy, socially responsible investing
posted by The Riverman at 11:52 AM
1 Comments:
We are in a hurry. The hurry is: we humans are in the process of destroying our planet. Global warming is the single most significant environmental crisis the world community has ever seen. The 2007 G8 Summit in Germany will focus on the reversal of global warming. President Bush, of course opposes this proposal. Like his strategy in the Middle East, he has a better idea, and he wants to convince the world of something they already know is untrue. This time it’s not that there are weapons of mass destruction in Iraq, but that global warming is not that dire an issue.
Our Nero-like President fiddles, but we cannot allow our Rome to go up in flames. This isn’t a city’s destruction we speak of. It is the end of all of us, of history, of every thought and feeling humankind ever produced. Our present federal government is not going to do anything about this crisis.
Our company, Connecticut Real Estate and Construction wishes to do something about it, because Connecticut needs workforce housing in significant number for very important reasons. Suburban sprawl is killing the environment. When we continually clear off two acres and more per household to put up large houses, we cut down trees which produce oxygen, we deplete the filtering system for our water, and we make houses which leave a carbon footprint which further opens a hole in the ozone. If we instead build multiple units together and build them with solar photovoltaic cell panels and with geothermal heating and cooling, we leave virtually no carbon footprint, we leave sufficient greenery to filter water run-off, and we provide our workforce with housing that allows them to stay in the state and not flee to the South and Southwest as has been the recent trend. As a result, those businesses (and their tax revenues) which require those workers need not flee with the workforce, a trend we have seen throughout the Northeast region of the country.
Additionally, we will build elderly housing. The Boomer Generation is aging. They are retiring at record rates and require specific housing that does not exist in sufficient number. We will build it. We will build commercial buildings and office space to go along with the elderly and workforce housing. We need cooperation from local governments to achieve our goals, and we need that cooperation quickly. As we move forward, we will build with town tax rolls in mind. We are aware that the workforce housing will require significant services and expenses, most notably educational expenses. This is why mixing the elderly housing with the workforce balances the ledger, for the elderly pay taxes without sending children to schools. Further, the commercial and office buildings will bring in significant tax revenues without pulling out revenues from the local municipality. This formula is referred to as “Smart Growth” and is to be part of our plans.
While proposing “caution” and “care” is never foolhardy advice, studies on these issues have already been done and “smart growth” is necessary throughout the state. We cannot wait. The cost is too dear for all of us to sit idly by and fiddle away time as the planet goes up in flames.
Sincerely,
Miles J. Shapiro, Partner
Connecticut Real Estate and Construction
VP Marketing and Commercial Real Estate
www.connecticutrealestateandconstruction.com
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