The word ‘ethical’ is bandied around a lot these days, but it can be hard to know what it actually means. There are no universal definitions for ‘socially responsible investing’ or ‘impact investing’ either, though they both have something to do with doing good while making money.
Imagine that you’re an investor who cares about how your money is used. How would you feel about putting your hard-earned cash into a company whose products and services promote social good? Does that sound like the kind of investment that makes sense for you?
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It Has A Positive Impact On The Environment
When you invest in companies that are environmentally sustainable, you’re helping to protect the planet and its inhabitants. Sustainable companies, including those that make solar panels or wind turbines, are critical to creating a cleaner, healthier future.
If you’re an investor who cares about the environment, you need to make sure your money is helping to make the planet a better place, not making it worse.
Investing in fossil fuel companies, including oil, coal and natural gas, is the opposite of environmentally friendly. Not only are those industries carbon-emitting, but they also contribute to climate change. Investing in sustainable, environmentally conscious companies is especially important as we enter a time when climate change is more visible than ever before.
It Helps People in Need
There are many ways investors can help people in need: by providing financial assistance for housing, food, healthcare and education, or by investing in companies that create jobs.
If you’re interested in impact investing, a special way of socially responsible investing, you can go so far as to invest in start-ups that solve social problems.
In this post we’ll explore the benefits of choosing an ethical ETF.
You Can Actually Make A Change
Some investors choose to make a positive change with their investment dollars by choosing companies that have a positive impact on society or the environment. This allows them to get more than just a financial return on your money. They’re also being a force for good by supporting companies that are helping to make the world a better place.
Investing in a company that makes solar panels, for example, is a positive investment because those panels help to reduce carbon emissions. Another example: investing in a company that makes high-quality reusable water bottles helps reduce the amount of plastic ending up in landfills.
You’re Supporting Diversity And Inclusion
If you’re passionate about diversity and inclusion, you’ll want to make sure you’re investing in socially responsible companies that are doing what they can to create a positive environment for all types of people.
For example, investing in a company that makes products for children with disabilities is one way to support businesses that embrace diversity and inclusion. Another example is investing in a company that creates products.
Final Words: Is It Worth the Investment?
Choosing an ethical ETF is about making the choice to support companies that have a positive impact on society or the environment, or that make products or services that benefit people in developing countries. Investing ethically is also about making sure that you’re using a socially responsible fund, which ensures that all of the companies in the fund are good companies to invest in.
