Newsletter
| September 2007 Social Responsibility & SRI Being a green business isn't just about environmental issues it also involves social responsibility. Green businesses are equally concerned with the communities they belong to and to society at large. Being socially responsibile means that an entity whether it's a government, corporation, organization or individual has a responsibility to society. We all know about "the bottom line" that business points to as a major factor of decisions. But focusung solely on the single bottom line of profit can have a negative impact on the world. On the other hand a triple bottom line of people, planet and profit can benefit the business as well as society and the environment. Breaking it Down People (Human Capital) refers to business practices that are fair toward labor and which have a positive impact on the community or region where a company conducts its business. Planet (Natural Capital) refers to sustainable environmental practices. A green business seeks to do no harm to the environment or at least minimize its environmental impact. Profit is what all businesses strive for and why they conduct business in the first place. However, in the context of socially responsibility profit needs to be an economic benefit enjoyed by society at large. Investing in Society It doesn't matter if you're a business or an individual, you can play a role in corporate responsibility through investment. Socially Responsible Investing (SRI) integrates your personal, social and environmental concerns with your financial interests. SRI maximizes both financial return and social good. Socially responsible investors look for corporate practices that embrace a triple bottom line. Moreover, investing in businesses that benefit people in poor communities while creating profit are also the type of business that SRI would encompass. Conversely, socially responsible investing avoids industries that use child labor or exploit workers, or avoids businesses involved in oil, alcohol, tobacco, gambling, or military industries. Four Strategies Social investing applies four basic strategies (screening, divesting, shareholder activism and positive investing) to maximize financial return and social good. Screening excludes investments based on social and/or environmental criteria such as mentioned above. Divesting removes stocks from a portfolio based on ethical rather than financial reasons. Recently, CalSTRS (California State Teachers' Retirement System) announced the removal of more than $237 million in tobacco holdings from its investment, portfolio after 6 months of financial analysis and deliberations. Shareholder Activism efforts attempt to positively influence corporate behavior such as: initiating conversations with corporate management on issues of concern, and submitting and voting proxy resolutions. Positive Investing involves making investments in activities and companies believed to have a high and positive social impact and tend to target underserved communities. Positive investing efforts may provide mortgage and small business credit to minority and low-income communities. Socially Responsible Investments perform as well as or better than conventional investments. In fact over $2 billion were spent on Socially Responsible Investing in 2005. From mutual funds to direct investment you too can take part in socially responsible investing through a variety of means. Find out more at: Co Op America - Social Investing Kiva - loans that change lives Citation: this newsletter was written using information from Wikipedia and Co Op America Back to the Newsletter page Sign up to get your copy of the Pylon Page |
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