There has been a growing awareness of the impact of investments on society and an increasing demand for investments aligned with one’s values. Ethical investing focuses on a company’s social responsibility and sustainability, rather than just its financial performance, when making investment decisions.
An investor who practises ethical investing may exclude companies in certain industries from their portfolio because of their negative impact on society or the environment. Alternatively, that same investor may choose to include only companies that meet certain standards of conduct regarding things like fair wages, safe working conditions, and pollution controls.
That said, there are many benefits to being an ethical investor, not just for yourself but also for humankind as a whole. Let’s take a look at some of them…
Help the Environment
One of the best reasons to invest ethically is that you can help the environment. Many of the businesses that ethical investors avoid have a negative impact on the environment.
Mining, drilling for oil, and manufacturing are all businesses that have a significant impact on the environment. For example, mining can pollute nearby rivers and destroy the local wildlife. Oil, a mining product, has been proven to contribute to global warming and climate change.
Helps Support Businesses Working To Make a Difference in Society
Ethical investors use their money to support businesses that positively change society, such as charities, humanitarian organisations, co-operatives, and businesses that provide green energy.
Ethical investors also avoid supporting businesses that exploit their customers or workers. For example, ethical investors might avoid companies that make workers work in sweatshops, which are known to exploit employees by overworking them while giving them measly pay.
Inspire Other Investors to Make Ethical Investments
Ethical investors are interested in supporting socially responsible businesses because they want to make a positive difference in society. They’re not trying to profit quickly from these companies like unethical investors do. They’re interested in supporting these companies so they can succeed and make a positive impact on society.
This can inspire other investors who want to use their money to good use to make ethical investments for the long-term benefit of society and humanity.
As a sole investor, you might not see the impact of your money on a large scale, but if you inspire others to do the same, humankind can benefit wholesomely.
Create More Jobs
By supporting businesses hiring people in healthcare, education, and more, Ethical investors can help create jobs for thousands of people who may have a harder time finding a job.
And by creating jobs, ethical investors provide income to families, improving the quality of life for many people dependent on income.
The Bottom Line
Ethical investing is about much more than stock picking. It’s about investing your hard-earned money in a way that makes a positive difference in the world and helps create a more equitable society where everyone has the same opportunities to succeed.
All you have to do is choose the right stocks, and you’ll be on your way to a brighter future for everyone.
