Socially responsible investing (SRI) is an investment strategy where you consider the impact of your investments on people, the environment, and society.
This type of investing has become increasingly popular in recent years as more people aim not only for financial returns but also to make a positive contribution to the world.
How exactly does socially responsible investing work, and what are the options? Discover the different forms of socially responsible investing and learn how to start investing responsibly through crowdfunding with Lendahand.
What are the forms of socially responsible investing?
There are several ways to invest responsibly. Some of the most popular forms include:
- ESG Investing: With ESG investing, companies are evaluated based on their performance in Environmental, Social, and Governance factors. Investors choose companies that score high on these criteria, ensuring their investments support sustainable and ethical practices.
- Impact Investing: Impact investing focuses on investments that not only provide financial returns but also create measurable positive outcomes, such as benefiting the environment or improving social conditions. Common themes include renewable energy, access to education, gender equality, and microfinance.
- Exclusionary Screening: Investors using exclusionary screening avoid companies or sectors that do not meet certain ethical standards, such as those involved in weapons manufacturing, tobacco, or fossil fuels.
Three Tips for Socially Responsible Investing
- Do your research: Not all investments labeled as ‘green’ or ‘responsible’ truly are. Check multiple sources to ensure a company or fund is transparent about its impact and adheres to ESG criteria.
- Think long-term impact: Socially responsible investing is about creating a sustainable future. Focus on investments that generate both financial and societal results over the long term.
- Diversify your portfolio: By spreading your investments across different sectors and themes within SRI, you reduce risks and increase the chance of stable returns and broader societal impact.
Socially Responsible Crowdfunding
Crowdfunding is a form of socially responsible investing where you join forces with other like-minded individuals to support the growth of sustainable projects. At Lendahand, for example, you can invest in micro-entrepreneurs in emerging markets, helping them expand their businesses and strengthen their local communities. This type of crowdfunding allows you to make a big impact with relatively small investments.
Responsible Investing at Lendahand
At Lendahand, responsible investing is at the heart of everything we do. We continuously analyze the impact results of our crowdfunding projects and publish an annual Impact Report on our impact page, sharing the outcomes from the previous year.
The crowdfunding projects at Lendahand focus on sustainable investments that create positive change in the world. There are different types of investments possible at Lendahand, whether it’s promoting clean energy or creating jobs in developing countries. Rest assured that all of your investments through Lendahand contribute to a better future while earning returns on your investments.
Ready to Start Crowdfunding with Lendahand?
Socially responsible investing offers a unique opportunity to earn financial returns while making a difference in the world. Whether you choose ESG investing, impact investing, or socially responsible crowdfunding, you can directly contribute to a better future.
Get started with investing today via Lendahand and join us in making a positive impact!