A Guide to Socially Responsible Investing

Work + Money
By Deborah Adeyanju
May 29, 2018

Stay­ing on top of the lat­est invest­ing trends can seem like a learn­ing a new language.

For one thing, there’s an alpha­bet soup of terms to under­stand — from alpha to beta to pas­sive invest­ing to socially respon­si­ble invest­ing to values-​​based invest­ing. Even when the indi­vid­ual words make sense, it’s not always clear what they mean.

Yet with $8.7 tril­lion of pro­fes­sion­ally man­aged funds in the U.S. being directed toward socially respon­si­ble invest­ing — out of a total of $42 tril­lion of total pro­fes­sion­ally man­aged assets — accord­ing to 2016 fig­ures from the Forum For Sus­tain­able And Respon­si­ble Invest­ing (US SIF), it’s obvi­ously more than a pass­ing trend.

But what exactly is socially respon­si­ble invest­ing and why should you care about it? Equally impor­tant, what isn’t it?

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Impact invest­ing isn’t just for non­prof­its or state and local gov­ern­ments. Ven­ture cap­i­tal is on board, too.

Nancy Pfund, Founder and Man­ag­ing Part­ner of DBL Part­ners, pur­sues a “double-​​bottom line,” aim­ing for “top-​​tier finan­cial returns” while work­ing closely with indi­vid­ual port­fo­lio com­pa­nies to help them opti­mize social con­tri­bu­tion, cli­mate effects and com­mu­nity engagement.

For her, it’s a mat­ter of putting first things first: “You have to really believe it’s going to be a suc­cess­ful finan­cial invest­ment first and foremost.”

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