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Sustainable & Responsible Investing Strategy to Transform Your Investing & the World


There was a time not long ago when your only alternatives to old-school investing were in a few socially responsible mutual funds that screened out certain companies from their portfolios. That screening was based on values criteria such as alcohol, tobacco, pornography, and weapons. For some investors this values-based screening made them feel good about their investments. But for many others, the question remained: What impact does this strategy actually have in the world?


The sustainable and responsible investment (SRI) movement has grown and evolved significantly from its socially responsible values-driven roots. While values-based screening is still a prominent strategy, you can now use the services of firms and advisors offering true state-of-the-art SRI that include sustainability screening, community investing, and shareholder advocacy strategies in their toolkits. These strategies improve the investor experience and amplify the impact of SRI on the world.

Community Investing

We can allocate a portion of our investments towards community development to fight poverty. This way some of our money is directed toward communities underserved by traditional financial services ( For example, you place $50,000 in a pool or note that is used by a microfinance institution to lend money to women entrepreneurs in developing countries who are starting micro-businesses to support their families. Or perhaps your $50,000 provides financing for first-time homebuyers in a distressed inner-city or rural community. In both cases, poverty is reduced and local communities are strengthened.

Shareholder Advocacy

Shareholder advocacy, activism, and proxy voting are other tools we can use to press for improved practices at companies we own. SRI firms act alone, together, or with other organizations to apply pressure on company management and boards of directors on issues that matter to SRI investors. One example is a recent shareholder resolution filed at ConocoPhillips requesting that the company report on the environmental and social impacts, including that on native lands, of its tar sands drilling operation in the Canadian Boreal Forest. Such campaigns often result in companies looking at their practices and policies in a new light and making improvements which can benefit shareholders and the world. There will be over 300 similar shareholder campaigns this year.

These three strategies (screening, community investing, and shareholder advocacy) can enhance investment outcomes while positively transforming the world. The site contains links to academic studies debunking misconceptions about sustainable investing.

The best part about the SRI movement is that anyone can apply these strategies to their investments. A citizen can start by investing directly with mutual fund families listed at the Social Investment Forum, Additionally, a citizen, family, trust, or foundation may engage a credentialed professional to help with more personalized and complex service needs and advice.

By joining this movement and applying these smart SRI strategies to our investments, we can transform the world, and for that we all come out ahead.

References for finding professional services include:

Social Investment Forum - www.socialinvest.orgFirst Affirmative Financial Network - www.firstaffirmative.comFinancial Planning Association - www.fpanet.orgCalvert Mutual Funds -

Eric A. Smith, CFP®, AIF® is Senior Wealth Officer with Goodfunds Wealth Management. He is also an investment advisory representative and registered representative with KMS Financial Services, Inc., Seattle. For more information:


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