Finance was once criticized as soulless. Ethical investing startups are changing that by prioritizing humanitarian companies and the democratizing of the markets. Investors are more conscious of the issues affecting humanity. Picking companies and funds which take into account environmental and social responsibilities, and hundreds of other human factors are what the people want.
The Rise of Ethical Investing
Finance was once criticized as soulless but ethical investing startups are changing that by prioritizing humanitarian companies and democratizing of the markets.
Morry Brown had what so many young finance graduates wanted: he was an associate at Goldman-Sachs. His career was set. A steady ramp of promotions leading to Rolexes and BMWs was his for the taking. But Morry wasn’t satisfied. What good was he doing for the world as a spreadsheet monkey? And so he quit, to found a company that merged investment with ethics: EarnWell.
EarnWell’s mission was remarkably simple: to create a portfolio of the 100 most ethical S&P 500 for the socially active casual investor. They took into account carbon footprint, gender equity, association with weapons production, environmental sustainability, and hundreds of other factors. Over 90% of the ‘EarnWell 100’ earned a perfect score on the Human Rights Campaign’s corporate responsibility, and the carbon footprint of the portfolio is 80% lower than the S&P index funds.
Other opportunities for socially responsible investing have begun to crop up everywhere. Recently, industry heavyweight Pacific Life launched Swell investing, with portfolios in renewable energy companies, researched-focused biotechnology firms working towards disease eradication, and zero-waste business.
This comes at a time when research has shown corporate leadership that responsibility isn’t just good PR — but profitable. If more companies put ethics before short-term gains, social activists — and investors — might just see the change they want.
Read more about how doing the right thing is just as profitable from Forbes.
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| Written by Dante Vaisbort