What is ethical investing?
If you are in stock market investing you may have heard of ethical stock market investing or also known as socially responsible investing. What this means is that you invest in companies and other funds that support ethical policies. The range can be from those companies that don’t harm people in any fashion to those that are environmentally conscious and produce products and services that help the earth as well as people.
Most investors are looking for the following from their investments:
- Investments which have adequate financial returns.
- Investments which are secure.
- Investments which are ethical.
Avoiding Unethical Investments
Some investors feel that there are no standards which can be created for ethical investing since each individual has their own set of values and morals. If no starndards are created, however, then even the most harmful investments can be called “ethical” by some. Fortunately, there are several basic values that most people share:
- Avoid Causing Illness, Disease & Death
- Avoid Destroying or Damaging the Environment
- Avoid Treating Honest People with Disrespect
If you are interested in finding out where your investments might be going because you would prefer to invest in ethical stock then you will need to get some written reports on where your investments are actually going, especially if it’s your mutual or retirement fund. Make sure to get a copy of the prospectus to see what the policies actually are. You should ask for details from a financial adviser. Make sure to check out the details even if it claims to be green or ethical.
You need to research all of the different companies that you invest in.
For instance, weapon manufacturers, tobacco companies and others that are known for exploiting employees or the environment are not going to be considered ethical. Those are easy to spot, but there are others that might have unethical practices that are much harder to spot so this is why you need to do research on different companies, especially if you are not sure of their practices.
Next you should take time to evaluate the different services and/or products that each company offers. Try to avoid those that seem to be involved in questionable practices and the products don’t seem to be something that is of benefit to the environment or to people. Focus on those companies that perform charitable services or often donate to worthy causes.
After you have done your research you should sit down and make a list of all the companies that you want to stay away from when it comes to investing your money. This list should be given to your financial adviser so that they are made aware of your concerns and then they will know not to consider investing any of your money in those companies stocks.
Make sure that you find all the companies that seem to offer services or products that continually support different environmental issues, health issues, promote good health or help people and the earth in a variety of different ways.
Make a list of the companies you feel would be good ones to watch and invest in and give this list to your financial adviser just as you did with the companies to stay away from.