What: Impact Investing: Investing in socially responsible companies.
When: December 18, 2017
Why: “76% of millennials see investment decisions as a way to express their social, political and environmental values”.
This is an interesting concept overall. This is also nothing new as socially responsible investing (SRI) has been around for a while. The concept is straight forward and simple. Create an investment fund that invests in companies that meet some socially responsible criteria. This could mean many different things depending on what the customer is searching for.
For those concerned about health it could be avoid companies that sell junk food, cigarettes, and alcohol. Those focused on climate change could invest in clean energy alternatives. If political party is the concern it could focus on investing in companies that support one parties overall message. The possibilities are virtually endless. However, the bottom line is that you must have investors to keep a fund open. This means whatever the idea it must reach a decent amount of people to be sustainable.
Additionally, these types of funds generally will come with extra associated costs. The millennial generation says they are looking for ways to have an impact while investing but what will they say if returns come in much lower? In many cases doing the right thing is not the most profitable way of conducting business. No matter what happens it is great that such a high percentage of millennials are wanting to make a difference. That 76% number was just pulled from the article and has no source so take it with a grain of salt as well. If there is enough interest in anything wall street will find a way to make a profit, so it is great to hear this being discussed.
What Are Your Thoughts?
- Do you care where your investment dollars are directed?
- Would you take a lower return on your investment to make a positive impact?
- Have you invested in an impact investment in the past, please share your results?