What is socially responsible investment?
Socially responsible investment is a method in which investors use criteria based on the possible ethical or social consequences of investment to decide which companies invest companies. Traditional investment tends to mainly consider the possible financial profit of specific investments. Socially responsible advocates can easily avoid investing in companies dealing with products or problems against which they are morally against. They can also buy mutual bonds or stocks from companies in the hope of creating what they consider to be a positive change.
Investing exclusion is one of the main types of socially responsible investment. Investors may decide not to give money to companies if they do not agree with their business philosophies. This may be due to the type of products such as firearms, pornography or alcohol. Investors may also decide to exclude specific companies if they feel that companies are usingunfair business practices such as child labor. The exclusive investment is BNA Based on the idea that refusal to invest in specific companies will cause them to lose profits and be forced to change.
Investing from activists is another main type of socially responsible investment. Investors who use this approach are looking for companies that promote products or problems with which they agree politically or morally. They seek to help companies become stronger and be able to continue their goals. Investments of activists may also take the form of investors who buy shares of companies against to become shareholders. Given that investors would become parts of parts, they could participate in shareholders' meetings and try to change the policies of companies from the inside.The process of socially responsible investor begins with an investor that reviews potential companies. Looks at VeliThe bone and the principles of the company to decide which methods will be the most effective companies for the parts. For example, an investor may decide that the use of activist strategy and becoming a shareholder can more likely to cause a change in smaller corporations.
In addition to buying shares or bonds of companies, the investor can participate in community investments. This type of socially responsible investment involves providing money to the local community investment group. It differs from charity gifts, because the group would promise the payment of interest to the investor after an agreed period of time. Money in community investment is usually used to finance local projects, such as helping small businesses or initial assistance projects for low -income clinics.
Critics of the socially responsible investment strategy claim to be often ineffective. They feel that companies do not lose profits just because some investors do not invest with them because of moral reasoning. CriticCI also claims that investing activists takes too long small changes in corporate business policies.