A Guide to Sustainable and Responsible Investing

Many companies want to make a lasting impact, not only with the services and products they sell, but also with the investments they make. Intentional choices of investments can not only add to the stability and growth of their investment portfolio, but can also make a positive social and environmental impact.

Sustainable and Responsible Investments (SRI) is a way that many organizations add value to their investment strategies. Not only beneficial for the earth, social investing is a rapidly growing field within the financial industry with a myriad of diversified options. If your organization is considering some changes in investing, learn more about what is involved in this conscious and sustainable investing trend.

Elements of Sustainable and Responsible Investing

What is all included in an SRI asset? Investments work to achieve certain goals in environmental, social, and corporate governance, or ESG categories. All SRI investments aim to help improve our world in ethical ways.

  • Environmental: Investments go towards efforts to reduce a carbon footprint, conserve natural resources, eliminate waste, and come up with innovative solutions for energy efficiency and finding sustainable energy sources.
  • Social: Investments may help advocate for labor, employment, and human rights. Improving community relations on the national and international level are prioritized and ensuring the safety of products and quality of life for consumers is also a concern.
  • Governance: Best practices are carried out within organizations, including shareholder rights, board diversity, and anti-corruption practices. Integrity and transparency mark the organizational leadership of the businesses supported in investments.

Learn More about Values-Based Investing by Downloading Our Guide.

VBI Guide

Download Now

Approaches to Implementing SRI

In creating a portfolio that represents a diverse group of ethical investments, there’s more than one way to go about it.[1]

  • Negative Screening: A typical approach is to rule out investing in any company that fails a certain set of guidelines.[2] In other words, if they engage in activities that harm the environment, have a history of unethical decision-making within the company. Tailoring your investments in this way can help you steer clear of investments in out-of-touch business practices that would hurt your portfolio in the long run. However, being extreme in divesting could remove some high yield investments. Being selective about which investments to avoid could be beneficial.
  • Positive Screening: Strategically supporting stocks or industries that are making positive impacts on the environment and setting an example in socially responsible business practices is another way to invest. Unlike a Negative Screener, which only ensures that the investor is not supporting negative practices, investing positively can help fund changemakers and innovative problem solving specifically. While this can help pave the way for a more thriving environment in the future, using this as a sole strategy can reduce the diversification of your portfolio significantly.
  • Shareholder Engagement: Another approach to making an impact through investments is to engage with publicly traded companies to influence them to make environmental reforms and encourage social responsibility. You may have an opportunity to have a greater level of impact promoting green energy at a large oil company. It is a proactive way to give voice to the voiceless, advocating for corporate decisions that make positive changes for all employees and the surrounding community. Stepping into this role requires more than just your money, but also time invested into making a change as a shareholder.
A Guide to Sustainable and Responsible InvestingAvenues of Taking Action

Ethical investing is a challenging endeavor. As of right now, ESG rankings are not standardized, making decision making about which organizations to support challenging. You want to invest in ways that align with your organization’s core values and mission, adding value to your company through sound investments while supporting what’s truly best for our environment, social justice, and ethical corporate governance.

The team at Beacon Pointe can help your investment committee create a plan that meets your organization’s goals, finding the right balance of investments that is both soundly diversified and responsible in making a positive difference in the world.

Relentlessly thorough in our research process, our team is committed to finding responsible investing strategies that work for your company. If you’d like to learn more about what responsible investing might look like in your portfolio, contact us today.

[1] Maximpact Blog. A Guide to the Different Types of Social Investing. http://maximpactblog.com/a-guide-to-the-different-types-of-social-investing/

[2] Forbes. Socially Responsible Investing: What You Need To Know. http://www.forbes.com/sites/feeonlyplanner/2013/04/24/socially-responsible-investing-what-you-need-to-know/#74a133425863

Important Disclosure: This content is for informational purposes only. Opinions expressed herein are subject to change without notice. Beacon Pointe has exercised all reasonable professional care in preparing this information. Some information may have been obtained from third-party sources we believe to be reliable; however, Beacon Pointe has not independently verified, or attested to, the accuracy or authenticity of the information. Nothing contained herein should be construed or relied upon as investment, legal or tax advice. Only private legal counsel may recommend the application of this general information to any particular situation or prepare an instrument chosen to implement the design discussed herein. An investor should consult with their financial professional before making any investment decisions.

© Beacon Pointe Advisors. All Rights Reserved.


You are now leaving the website of Beacon Pointe Advisors and will be entering the website for Institutional Intelligent Portfolios®, an automated investment management service made available to you exclusively through Beacon Pointe Advisors. Beacon Pointe Advisors is independent of and not owned by, affiliated with, or sponsored or supervised by Schwab. Schwab has no responsibility for the content of Beacon Pointe Advisors' website. This link to the Institutional Intelligent Portfolios website should not be considered to be either a recommendation by SPT, Schwab, or any of their affiliates, or a solicitation of any offer to purchase or sell any security.

Privacy Preferences
When you visit our website, it may store information through your browser from specific services, usually in form of cookies. Here you can change your privacy preferences. Please note that blocking some types of cookies may impact your experience on our website and the services we offer.