Socially Responsible Investing for Dummies: How Do You Define SRI?

SRI%20for%20Dummies.jpgI am extremely interested in socially responsible investing (SRI), however knew very little about what that actually means. Which is why I was excited to pick up a copy of Ann Logue‘s new book, Socially Responsible Investing for Dummies. Logue is author of several other Dummies series books – she specializes in making complex topics accessible for everyone. She recently wrote for 3p about CSR and the bear market.
In my day job with SVT Group I work with organizations that are trying to grow their revenue and impact to enhance their effectiveness (and fundraising efforts) by measuring, managing and communicating their positive impact. As such I get a lot of people asking for advice in SRI and impact investing. Logue’s book helped me make sense of this arena.
Logue advises each investor to conduct their own due diligence, and create their own idea of what SRI means for them based on their individual issue areas and passions. The truth is that SRI is a tricky topic to advise on because it means something different for everyone, as it should. But for each of us, it’s not all that complicated. For some it’s about not investing in tobacco, alcohol or firearms – the sin filter. For others it may be about investing in companies with strong CSR. And others may select companies based on the positive impact of their products and services.
I recently sussed out the socially-just banking landscape (and wrote about it). Based on what I found I opened a Shorebank high yield savings account (which offers 2.45% interest rate) as well as a CD with Microplace (which offers 5% over 2 years). I believe that you don’t have to sacrifice returns to make an impact in all cases (my research in banking showed a lower return on most social/environmental banking products, hence my choice of Shorebank, which is highly competitive with other savings accounts, and Microplace). I closed my ING and Vanguard money market accounts in turn. I was raised with the philosophy of investing for returns and donating the surplus to charity, but the more I learn the more I realize how harmful that viewpoint can be, and I am trying to embody that belief. And a recent AT Kearny study found that companies committed to sustainability outperform their peers on the market.

I could have used Socially Responsible Investing for Dummies a few years ago when I was investing in stocks. I wanted to buy shares in companies that were environmentally friendly and advancing the notions of sustainability that I hold dear. I bought shares in Whole Foods, which I think was a fine buy (at least in terms of social and environmental impact), despite the decline in stock value. But I also bought shares of Ecolab. I probably shouldn’t admit this, but I was in such a hurry to buy green stocks that I was thrown off by the company’s name and mistook Ecolab for Ecover! Ecolab, unlike Ecover, which is all about eco-friendly cleaning products, makes products which include pest control and industrial sanitizers with very little care for the environment (at least as far as I can tell, despite a corporate sustainability report). Just evidence that I should have done my research, as Logue recommends. The other option that I have now that I’m a shareholder in a company that I don’t entirely agree with is to become an activist shareholder. As Logue explains, while some people avoid companies they disagree with, others seek those out so that they can rally for change from the inside.
In any case, Socially Responsible Investing for Dummies offers a thoughtful, guided approach for SRI. Logue clearly understands the ins and outs of investing and her book is an excellent resource. If you are interested in aligning your portfolio with your values and passions, I highly recommend picking up a copy.

Amie runs Cobblestone Solutions, LLC, a consultancy focusing on business development, marketing, communications and strategy for mission driven companies. Previously, Amie served as Director of Business Development for Viv (a Bay Area environmental start-up), Program Manager for Social Venture Technology Group (a boutique consulting firm focused on measuring social and environmental impact), and Associate Consultant at Bain & Co (a global management consulting firm). She is particularly interested in innovations that reduce waste, altering consumer behavior for good, and leveraging the power of business to solve the climate crisis. You can read more from her on her blog, on, and on JustMeans.

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