HER MONEY

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HEARTFELT INVESTING
NEW FUNDS AND APPS MAKE INVESTING IN VALUES THAT MUCH EASIER

By Lyn Dippel

JUNE/JULY 2016

With elections coming up, many of us are looking for candidates who will best promote our values. You can also vote with your pocketbook.her-money1

As a consumer and investor, you have the power to invest in companies whose actions reflect your values. Collectively, this power can create a tremendous shift in companies mores, resulting in positive change globally.

Funds invested in sustainable, responsible and impact investing practices grew 900 percent between 1995 and 2014 and now account for about one of every six dollars in professionally managed investment portfolios.

Women are leading the way in socially responsible investing; they are nearly twice as likely as males to consider the impact of investment decisions. According to Morgan Stanley, just over 75 percent of women expressed an interest in sustainable investing, compared to 62 percent of men. Furthermore, as more wealth is transferring into the hands of women, they realize their money has impact in the world and are choosing to use it in ways that align with their values.

You can make an impact in several ways.

Be purposeful about where you invest. The oldest and most common types of investments are socially responsible investment (SRI) funds, which screen out companies based on things like avoiding weapons, tobacco, gambling, alcohol or other perceived negatives. Most fund companies offer at least one such option and some offer such specific mandates as environmental impact or human rights. Calvert Investments, for example, has been one of the pioneers in socially responsible investing (calvert.com).

Another option, sustainable investing screens for companies with positive environmental, social and governance (ESG) profiles. Fund companies such as ESG Managers, esgmanagers.com/sustainable_investing/ overview, specialize in this.

The most recent trend, impact investing, involves companies that create positive change through their products or services. Pax World, another pioneer, has begun to narrow in on impact investing. The company website has an excellent summary of the evolution in this area, paxworld. com/about/sustainable-investing.

The nonprofit Forum for Sustainable and Responsible Investment (US SIF) is a respected source for such areas as advancing women’s causes, climate change and addressing corporate money in politics. And the website, ussif.org, has a mutual funds screen that rates various value areas.

New apps and tools help investors concentrate on specific areas of impact and help consumers make informed choices. Apps like GoodGuide mean you can scan a product barcode with your phone to receive ratings for health and environmental and social responsibility. While many products aren’t yet rated, it is a great start. The next time you pull out your wallet or investment statement, consider the impact you want to make.

Lyn Dippel, JD, CFP®, president of FAI Wealth Management, provides financial planning and investment management for transitions such as retirement, career changes, sale of a business, relocation and inheritance.

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