“Many socially responsible investors are under the impression that there needs to be a tradeoff between social impact and financial returns. We believe it’s possible to have both and tradeoff is not always necessary,” said Josh Cohen, managing partner at the VC firm City Light Capital. Indeed, companies that do good are gaining momentum through consumer preference, word-of-mouth, and positive press. In a recent interview by Pepsi’s CEO …, I was impressed that they have taken their “Performance with Purpose” motto to the next level. Pepsi is led by a woman with a diverse background, is making strides in improving healthiness of products, and recently was honored with theCorporate Social Responsibility Outstanding Contribution Award in China. As an investor, it is your responsibility to find investments that offer financial returns, and it is your right to also demand social impact. Below, we share tips for investing with purpose.
1. Prioritize Your Causes. Many of us are passionate about specific causes which have been relevant in our lives. For example, if you have loved ones that are afflicted with cancer, put your investments into companies with the best chance of therapeutic advancements. If your cause is planet Earth, there are many clean tech ETFs to choose from. Likewise, you can select investments based on your interest in causes ranging from local farming to community banking to education.
2. Research The Options. There are many research sites that can provide listings of mutual funds, charts, and performance data to help inform your choice. For starters, check out the resource guides provided at theSocial Investment Forum and SocialFunds.com. You might also want to check out lists such as Newsweek’s Green Rankings which identifies the 500 greenest companies.
3. Define Your Bottom Line. The triple bottom line includes people, planet and profits. As an investor, you must define your investment return goals with impact. Are you willing to accept a lower rate of return or some risk in exchange for doing good? Do you need to see tangible benefits as highlighted...
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