What does ethical investing look like on the ground? This depends on where your particular concerns lie, but you can identify ethical investment practices based on a few key factors. In a nutshell, ethical investing can be categorized as investing money in a sustainable and responsible manner. This covers both the way you invest and the things you choose to invest in.
A major part of ethical investments is recognizing the human impact on the environment and choosing investments that propel more environmentally friendly practices. It’s fairly simple to invest ethically if you know what to look for.
5 Signs to Look For
If you want to proceed with your investments in the name of ethics, don’t make a move unless you’re sure the investment qualifies. Here are a few signs to look for to make sure it’s an ethical decision.
- Internet Safety: This one may seem a little strange, but many people forget just how much your investments and the internet are connected. It’s almost impossible to do business of any kind nowadays without using the internet, but few people think about the safety of doing so. Protect your interests by encrypting all related emails. Encryption makes the information unreadable so it can’t be accessed if it falls into the wrong hands. In addition, install an antivirus to avoid downloading malware, keep your passwords to yourself, and be wary when using public internet access.
- Transparency in Financial Reporting and Company Activities: You can’t hope to call your investments ethical if you’re going to hide certain business dealings or tell partial truths to involved parties. Remaining transparent involves being willing to divulge all non-private information if there’s probable cause and avoiding backchannels when reporting finances. It’s also wise to hire a professional to handle the reporting in order to avoid any mistakes.
- Employee Treatment: There’s a certain commitment to your workers that comes with socially responsible investing. First and foremost, your investments should never leave your employees out to dry, but should support your company and those who work there. When investing in a business setting, employees should also reap the benefits of your investment rewards. Social responsibility means caring for those under your leadership. If an investment takes you away from that realm, then steer clear.
- Labour Practices: Investments should also seek to create a positive impact on labor relations and human rights. As you research investing in a company, think of how it will reflect on your business and each affiliated party. For example, investing in an overseas company that uses child labor can reflect negatively on your business. Instead, look for reputable companies without questionable actions.
- Sustainability and Environmental Concerns: Being environmentally responsible is usually at the top of the list for ethical investing, especially today when green investments are king. Chances are you chose ethical investing because of a concern for the environment, and you hoped your speculation could be a powerful tool to tackle those issues. Some investments, such as switching your paper supplier to a company that uses recycled options, make an obvious positive impact, while others, like contracting your product materials from a known ocean pollutant, will look bad for your business.
Write Your Own Ethical Investing Priorities
Everyone has their own ideas and priorities when it comes to morals and ethics, and that should play a principle role in your choice of investments. Before putting down money, consider the strong moral stigma attached. Write down a list of things that are important for you to maintain with every speculation you make.
Every little bit helps to make the world of investing a more ethical and sustainable place. The great thing about ethical investing is that the returns are generally more reasonable and less volatile than other investments, which makes it a more positive experience in the long term.