Building wealth doesn't have to mean leaving your values at the door. From conscious capitalism to impact investing, you've got a lot of options for supporting your values through your investment strategies.
Broadly speaking, these options are part of a larger movement called "sustainable investing," designed to help you invest in ways that support your ethics and values.
Sustainable investing has become increasingly popular as more people look for ways to incorporate their beliefs into their wealth strategies. In 2019, $13.5 billion moved into sustainable funds—nearly three times the fund flows in 2018.1
One reason it's become so popular is that more people are recognizing that the companies solving the world's biggest challenges may be in the best positions to thrive. Often, that's because these companies are pioneering better ways of doing business.2
Beyond that, sustainable investing can also offer a greater sense of purpose. It can bring deep, personal fulfillment that may be just as valuable as financial returns.
So, if you're looking for more ways to integrate your values with your investing strategies, here's what you can do. These four approaches to sustainable investing can help align your beliefs with your financial choices.
SRI takes a values-based approach. That means your values guide your investment choices. So, SRI usually involves investing in companies that align with your social, political, and/or religious values. It can also involve screening out companies or industries doing things you stand against.
ESG investing involves supporting companies that are working to improve the environment or community. You are often looking to support companies working to improve their local communities or that have corporate cultures that support your values.
With thematic investing, your choices and investments are driven by one or more themes derived from your beliefs or ideas about what represents progress. These themes could include anything from green energy and cybersecurity to artificial intelligence, cures for diseases, religion, or more.
Impact investing is about investing in positive change to try to solve the world's big problems. That can mean investing in companies that fight world hunger, combat human rights abuses, or are otherwise striving to improve the planet and the human condition. These companies may be working to make positive change, or they may have a corporate culture that supports it.
"Sustainable investing is a way to fight the big problems, make real impacts, and support lasting changes that can shape the future."
Sustainable investing is about more than just putting your money where your mind is. It offers a way to champion and advance the causes that are most important to you. And it can empower you to fight the big problems, make real impacts, and support lasting changes that can shape the future.
In fact, when you integrate your values and your investment choices, you don't have to compromise on growth. That's because sustainable investing can be rewarding personally, globally, and financially.
Concerned about climate change?
Passionate about technological advances?
Interested in aligning your strategies with your personal beliefs?
There are a number of strategies available that can help you invest in the companies and industries that share your values and support your beliefs—and avoid businesses that don't.
If you're thinking about your values and how to align your investing strategies with them, give my office a call.
I'd love to hear your ideas and be a sounding board for you. I have a lot of experience helping my clients create sustainable investing strategies, and I look forward to the opportunity to help you find new ones.
Michael Whitman, MBA, CFP® Millennium Planning Group
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