What is Responsible Investing?
Responsible Investing is the practice of taking social and environmental concerns, not just monetary, into account when making investment decisions.
How is your school linked to responsible investment?
- All universities own stocks of powerful companies – often millions, or even billions – in their endowments and their employee pension funds. As large institutional shareholders, universities hold sway with the companies they invest in. They have the power to raise important issues about the way that these companies are operating.
- Colleges and universities can use their investments to push for the progressive elimination of corporate practices that contribute to social and environmental ills.
Strategies of Responsible Investment
Passive: keeping your money where it is
- Corporate dialogue – Write a letter and find out more information about the company’s business practices
- Shareholder advocacy – File a shareholder resolution requesting that the management address a particular issue or corporate practice you don’t agree with which will be voted on by shareholders at the company’s annual meeting. Or vote on shareholder proposals submitted by other shareholders for progressive change. Proposals don’t need a majority vote to pass - many companies have improved their business practices on proposals with only 7%-10% of shareholder votes. To be eligible to file a resolution, shareholders must own $2,000 worth of the company’s stock for at least one year before the annual filing deadline.
Active: moving your money around
- Screened Funds – Invest in mutual funds that screen out companies involved in tobacco, arms manufacturing, resource extraction, sweatshop labor, and others.
- Affirmative/Positive Investment – Community investment – Invest in historically depressed areas, usually poor neighborhoods of color, to fund community revitalization, low income housing, or microenterprise. Social venture capital - Invest in companies that you do like, such as green technology
- Divestment – Take your money completely out of a company. It sends the most serious message, and is appropriate in certain situations.
