When it comes to investing, there are plenty of things to consider. After all, its your money leaving your pockets and going elsewhere. While some people might prefer risky investments to stand to gain more money, others are interested in something a little bit safer.
Fortunately, there are plenty of ethical investments available – and they can be great for your portfolio. Whether you’re looking for something as simple as a green fund that invests in environmentally-friendly companies or something a little more complicated like an impact investment fund with specific social or charitable goals, there are numerous ways you can invest your money with an eye toward doing good.
Here we’ll take a closer look at what it means to invest ethically and some examples of how you can get started with them today.
What Are Ethical Investments
When people talk about ethical investments, they’re referring to specific types of investment that are driven by a social or moral purpose. This means that these types of investments do more than just making money for their investors – they also create social good and make the world a better place.
It’s a win-win situation.
Ethical investments can take many forms, depending on what you’re passionate about and what you’re interested in seeing a change in the world. You can invest in various industries and companies, ranging from renewable energy to socially responsible real estate, to impact investing funds.
For example, if you are an animal lover, investing in companies that test on animals or use animal products isn’t the best idea for you. Similarly, if you have a strong stance against fossil fuels and climate change, oil-based investments probably aren’t for you.
The possibilities are endless.
Examples of Ethical Investments
Socially Responsible Investments
One of the most common types of ethical investments is socially responsible investing (SRI). An SRI fund looks to invest in companies that are making the world a better place, rather than those that might be harmful to society or the environment.
For example, an SRI fund might invest in technology, healthcare, or renewable energy companies with a positive social impact. Some funds even focus on companies making a charitable difference in the world, such as those that help women and children.
Environmentally Friendly Investments
Another common type of ethical investment is one that focuses on companies that help protect the environment. These funds can be a great place to start if you’re interested in ethical investing but aren’t sure where to begin.
This could include green industries, sustainable agriculture, or renewable energy investments. For example, you could invest in a company that makes wind turbines or solar panels or even a company that grows organic crops. So many industries can impact the environment positively, and investing in them can help protect the planet for generations to come.
Equity-Based Investments
The third type of ethical investment is one that’s focused on equity. Equity-based investments can take many forms, such as venture capital or impact investing. T
Impact investing allows investors to fund companies or initiatives that create social good while also growing their money. For example, you could invest in a company that helps provide clean drinking water to low-income communities or fund a nonprofit that provides educational services for special needs children. There are so many ways to invest ethically and positively impact the world.
Mutual Funds With A Focus On Ethics
If you’re looking to get involved in ethical investing but are unsure where to start, you can also choose to invest in funds with a specific ethical focus.
With these funds, you can choose to invest in a specific sector, or you can invest in a blended fund that includes a variety of different sectors. You can invest in funds focusing on renewable energy, green companies, or clean water.
In Conclusion
Investing ethically usually means aligning your investment choices with your personal moral principles or beliefs about what is good and bad. In other words, when you invest ethically, you want to invest in companies whose business practices align with your morals.
Remember that any investing comes with risk, and you must consider how much risk you can take when choosing your investment options.
Some people may be more comfortable with lower-risk investments that ensure their principal stays the same no matter what happens in the market. Other people may be willing to take more risk to see a bigger return on their money. And still, others may fall somewhere in between those two extremes based on other personal factors.