Feel-good finances: is it possible to make money while making a difference?
The way we invest our money continues to evolve, with philanthropic and feel-good factors becoming a built-in consideration that’s just as important as making a profit. From SRI investing to ESG scoring and onto impact investing, it can be tricky to know what’s what.
More and more, Socially Responsible Investing or SRI – an investment strategy that considers financial returns and its impact on environmental, ethical or social change – is driving the why and how of retail investors’ strategies.
For a long time, SRI investors used broad-stroke exclusion strategies to avoid investing in the so-called “sin industries”: tobacco, liquor, and gambling. However, the investment trend evolved in the 1960s when people began boycotting companies they didn’t agree with, and investing in projects that championed civil rights among other noble causes.
An excellent case in point is the protest disinvestment that happened in South Africa in the 1980s. During that time, the apartheid policy that caused discrimination against specific races sparked a mass withdrawal of individual investors and companies from South Africa.
SRI is an admirably principled approach, and paved the way for ESG scoring, which offers a much more pragmatic approach to assessing companies.
An ESG score is an objective measurement or evaluation of a given company, fund, or security’s performance with respect to Environmental, Social, and Governance (ESG) issues. This score helps investors find companies that measure up to their moral objectives, and gives their portfolio a feel-good factor.
One step further than SRI investing and ESG scores is impact investing, which is a sustainable strategy involving investments that generate a financial return alongside measurable positive social and environmental impact.
The easiest way to see your money make a real difference is by investing in the Swissquote Impact AMC.
Swissquote’s Impact Certificate is practical, builds profit and helps real people. Underpinned by smart investing, the dividend-focused strategy has two purposes: to generate returns for investors, and financially support projects that are making the world a better place.
The dividends generated through smart and strategic investing are converted into cash. That cash is then donated to projects hand-picked by Swissquote and its investors.
The current charity focus is the Swiss-based Solafrica project: Santé Solaire. This project uses the potential of solar energy to contribute in an ecological way to improve health care in remote areas of Burkina Faso.
Investment in Swissquote’s Impact Certificate provides access to performance and dividend growth, and funnels generous charitable donations directly to meaningful projects.