Career & Money

How To Find And Invest In Socially Responsible Companies

By Brooke Roberts
5th Sep 2022

We’re becoming more conscious about the social impact of our everyday choices—from the clothes we buy to where our food is sourced—so it’s no surprise that this extends to where we invest. Identifying where to invest your hard-earned can be confusing, especially when trying to find a company or fund that aligns with your values on sustainability, ethics, or social responsibility.
 
When looking into responsible or ethical investing, you’ll often see the term ESG; ESG refers to environmental, social, and governance considerations, and is used to evaluate how responsible a company is. The E (environmental considerations) has been in the spotlight for a few years now, but recent data from Sharesies reveals that 39% of Aussie retail investors now believe it’s very important to invest in socially responsible companies.

What Is A Socially Responsible Company?

Social responsibility ultimately means that a company is delivering a positive impact on society, rather than a negative one. Companies in industries such as gambling, tobacco, and fossile fuels are commonly seen as having a detrimental impact on society given what they produce and promote.
 
Companies and funds that deliver positive impacts can be from a range of industries. Some might contribute to First Nations causes, or provide healthcare or education services. There’s no limit to these options, so a good place to start might be considering the social causes closest to your heart and thinking about what sorts of businesses you want to see continuing to grow and support our collective future.
 
There are plenty of companies and funds which claim to be committed to ESG considerations. However, as we’ve seen with ‘greenwashing’, not all companies are walking the walk. So how do you find out whether or not companies are genuine about having a positive impact?

How To Identify If A Company Or Fund Is Socially Responsible

Like most research these days, a place to start is with a Google search into a company or exchange traded fund (ETF) you’re considering putting your hard-earned funds behind. Read any recent news—a focus for the Australian media is to hold publicly-listed companies to account. A quick Google could uncover any recent criticism of the company or fund.
 
Visit the company or fund’s website—many will have a dedicated page about their ESG approach and policies. Have a read and check if their ESG goals match the impact that you’d like to contribute to.
 
Finally, you can have a look into B Corps. To become a verified B Corp, businesses must meet high standards of performance, accountability, and transparency. This includes social and environmental performance, which means a B Corp certification is a bit of a cheat sheet of companies that are dedicated to being a force for good.
 
Sharesies is a proud B Corp, and some B Corp companies available on the platform include Australian Ethical (AEF), Allbirds Inc (BIRD), Sezzle Inc (SZL) and Synlait Milk (SML) (Includes Synlait Milk Ltd & Synlait Milk).
 
If social responsibility is important to you, consider putting your money to work on making an impact by investing in the companies and funds that are aligned with your personal values and beliefs. As always, make sure to do some research (also known as due diligence) and consider your wider financial situation and goals.
 
Brooke Roberts is the co-founder and director of Sharesies Australia, an online investment platform.
 
Sharesies Disclaimer: Investing involves risk. You aren’t guaranteed to make money, and you might lose the money you start with. We don't provide tax advice, personalised advice or recommendations. Any information we provide is general only and current at the time written. You should consider seeking independent legal, financial, taxation or other advice when considering whether an investment is appropriate for your objectives, financial situation or needs.
 
Image credit: Urban List

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