Socially Responsible Investing (SRI) Defined
Many of our clients are committed to socially responsible and impact or “purposeful” investing, and we work to express these values in their investment policy statements and portfolios. Impact investments are made with the intention to generate measurable social and environmental impact in addition to a financial return. When researching responsible investing strategies, it’s important to keep in mind that how you invest, and what you invest in, can be just as impactful as other investment strategies. Implementing a socially responsible investing (SRI) approach often results in a positive correlation with your core beliefs, your community and the environment.
“Sustainable, responsible and impact investing (SRI) is an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.”
– Source: The Forum for Sustainable and Responsible Investing
Socially-Responsible Investing (SRI) has been around for a couple decades and is defined by negative screening and shareholder advocacy. SRI investors deliberately seek funds that screen out investments in tobacco, weapons, animal testing, petroleum industries, etc.
Sustainable Investing is the next generation of SRI investing. It is characterized by investors seeking to invest in companies that demonstrate socially-responsible behavior or practices. This operational impact is classified as Environmental, Social and Governance (ESG) practices.
Impact Investing incorporates SRI and ESG factors and is directed investing to address a particular goal of the client. It is generally executed through private debt or equity, illiquid – the investment is narrow in scope.
Our advisors at Beacon Pointe will work with you to articulate your impact investing goals, creating a strategy that is consistent with your objectives. In implementing and monitoring this strategy, we will constantly search for new ways to express your values.
There are many different ways to express your socially responsible investing goals, two of which include inclusionary and exclusionary investing approaches.
Inclusion: We can deploy capital to funds that invest in companies that proactively promote a better world. This includes human rights, and social, economic and environmental justice.
Exclusion: We can invest client assets in funds that typically exclude investments in companies with significant business activities in, for example, alcohol, tobacco, firearms, gambling, nuclear power or military weapons.
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.
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