Choosing companies to invest in can be hard work. Finding out that they have bad business practices can make things even harder. If you’re like me, you want to invest money in companies who are mindful of the environment and their employees, and have a moral compass that does not just point toward making more money. Fortunately, thanks to good reporting and the internet, we know more about companies than ever before.
Sometimes it can be hard to believe, but there really are companies out there who are trying to make a difference and who want to show you that they are not soulless suits looting the environment and taking advantage of poor laborers. So how can you invest both smartly for your future and in a way that doesn’t make you feel morally bankrupt? You just have to find those companies.
For starters, decide what is important to you. Do you have religious beliefs that you want companies to align with? Is being environmentally conscious your biggest passion? Are there political stances you want to avoid? Doing some research following your biggest criteria will rule out some companies and highlight good options for you.
How do you do this research? I mean, many companies are not totally up front about political or religious beliefs. Or they may not go into their policies regarding their supply chains or where they get materials from. Read the company’s mission statement – that may provide some good starting points for you. Check the donor lists for political candidates you like (or don’t). If you see the company’s name, then you know where they stand.
Also, check other sources online. There may be news archives that will let you know if the company has been involved in any scandals in the past. You may not have noticed the reports at the time, or they may no longer be relevant, but you’ll feel better after looking around. If the company lists names on their website of their board members or the heads of the company, do some checking on them, too. You might be surprised at what you find!
An ethical investment usually avoids companies that negatively affect the environment, tests products or harms animals in the creation of their products, has practices that encourages discrimination or accepts unethical working conditions. You’d be surprised at how many companies get ruled out for one or more of these reasons.
You can check any potential investment company’s portfolio and do actual market research to decide if investing in them is right for you. There are also firms that specialize in ethical investments, so you can tell them what is important for you and they can help build and manage a portfolio for you. This is especially good if you are more comfortable with funds, because you don’t know the individual companies making up each fund and could have a potential conflict.
Whatever you decide, know that corporate sustainability will help everyone in the long term, so it is worth the work you put into choosing your investments!