Socially Responsible Investing (SRI) involves selecting investments based on ethical guidelines alongside financial performance. This approach appeals to investors who wish to align their portfolios with their values, focusing on areas such as environmental sustainability, social justice, and corporate governance. Below are three diverse examples of SRI in international markets.
In the context of climate change, many investors are turning to renewable energy as a viable investment strategy. This is especially relevant for those looking to diversify their portfolios internationally while supporting sustainable practices.
An actual example is the iShares Global Clean Energy ETF (ICLN), which tracks an index of global companies involved in renewable energy production, including wind and solar power. By investing in ICLN, investors gain exposure to companies in countries like the United States, Germany, and China, promoting a cleaner energy future.
Microfinance offers a unique approach to SRI by providing financial services to underserved populations globally. This investment strategy not only aims for financial returns but also seeks to foster economic development and empowerment.
An example is Kiva, a non-profit organization that allows individuals to lend money to low-income entrepreneurs across the globe. Investors contribute as little as $25, which is then pooled to provide microloans for small businesses in countries like Kenya, India, and the Philippines. This model supports local economies while offering investors a chance to directly impact lives.
Environmental, Social, and Governance (ESG) criteria are increasingly used by investors to evaluate companies’ ethical impact alongside their financial performance. This approach is particularly useful for those looking to invest in diverse international markets while adhering to SRI principles.
For instance, the Morgan Stanley Global Sustain Fund focuses on companies that meet stringent ESG criteria across various sectors, including technology, healthcare, and consumer goods. By investing in this fund, investors gain access to a diversified portfolio that includes firms from multiple countries and regions, all while supporting sustainable business practices.
By integrating these examples of socially responsible investing in global markets into your portfolio, you can achieve financial growth while contributing positively to society and the environment.