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CRM Summer Project: Socially Responsible Investing

Corporate Responsibility Mondays
As Summer quickly approaches it’s time for Corporate Responsibility Mondays to come to a close. It’s been a fun series as Josh and I have co-blogged about corporations in similar industries with differing records:

  1. Clothing:
    Bad: L.L. Bean
  2. Technology:
    Good: Dell and Green hosting
    Evil: Apple
  3. Clothing:
    Good: Maggie’s Organics
    Bad: Kohls
  4. Sweets:
    Good: Equal Exchange
    Bad: Sara Lee
  5. Shoes:
    Good: Tom’s, Hersey, No Sweat, Adbusters, etc.
    Bad: Nike
  6. Bananas:
    Good: Fair Trade
    Bad: Chiquita
  7. Clothing:
    Good: No Sweat Apparel
    Bad: J. Crew
  8. Fast Food:
    Good: Chipotle
    Evil: Burger King
  9. Stocks and Investing:
    Good: Socially Responsible Investing (SRI)
    Bad: Fidelity (and Playboy)

This week, as the Corporate Responsibility draws to a close, Josh and I will be talking about investing. Josh is highlighting a invest firm/stock you might want to stay away from. I’m going to take a different approach today and simply introduce you to the area, not a specific company, of Socially Responsible Investing.

Socially Responsible Investing (which I’ll call SRI from now on) is a fairly simple and straight forward concept, which is simply to have a goal of investing responsibly. What this entails will vary person to person and company to company so it’s something that takes a bit of research.
SRI has taken some criticism because the term doesn’t have clear standards with it or criteria by which to understand what is “responsible” and what is not. Critics say that anyone can simply write up a righteous sounding mission statement and label themselves SRI there by drawing customers and not really being required to perform at the same level of other Mutual Funds and stocks. In an industry that’s fundamental existence has to do with the bottom line, any one suggesting ethics or responsibility come first will be expected to be challenged and looked at funny. The critics do have a point. There are companies out there that have simply taken the label of SRI, but are neither being ‘responsible’ nor seriously ‘investing.’ Yet, that shouldn’t cause use to ditch the whole industry and invest without regard to our values.
If you have any intention of investing your money in the stock market during your life, whether for retirement, college, or just long-term investing, it’s important that your values are reflected in what your choosing. Some SRI stocks focus on environmentally green companies, others seek to avoid tobacco and alcohol, others actively avoid military and gun companies. SRI involves to components usually, screening and activism. Screening is like a mentioned above, filtering companies and stocks based on certain value criteria. They would decide what makes up their portfolio based on avoiding certain companies and seeking out other ones. Activism is the idea of using your investment and stake as a shareholder to encourage change in companies. So, an SRI Mutual Fund might invest in Apple computers so that they can advocate at the annual shareholders meeting for Apple to research more environmentally friendly ways of producing and recycling their products.
The hardest part of SRI is actually doing it. I’ve researched the field off and on for about a year. When I had the chance to set-up a pension with my work I didn’t have much of a choice, there was only one SRI to choose from, Calvert. I’ve been happy with Calvert so far, but I plan on doing more research this summer and seeing what I come up with. Hopefully after this brief lesson your interested in researching Socially Responsible Investing too. That’s why I’ve dubbed this the CRM Summer Project. Maybe this post can be come the conversation hub for our research on SRI and what conclusions we come to on were you should invest. Here are some links to get you started:

Full Disclosure: I currently have some Mutual Funds that are not in SRI funds. I had them before I discovered this important concept and had a desire to align all of my life with my values. I plan on moving them, but didn’t want to make any snap decisions, but rather move them once I understand what’s best.

Corporate Responsibility Mondays have been a ton of fun and I hope you’ve found them interesting and useful. I’ll continue to try and highlight important companies as I discover them, but for now it’s time to say goodbye to the weekly co-blogging with Josh and open Mondays once again.

Be sure to check out Josh’s final post on a stock to avoid.