Written by Michelle Haimoff
Whenever I get into a conversation about socially responsible investing, the other person usually says, "Do people really care about socially responsible stocks? Don’t people just care about making money?"
Socially responsible investing has long had a bad rap as a waste of time for people who need to make actual money. And in today’s volatile economic climate, its rap may worsen. Even in talking about wine, a recent New York Times article reads, “Sure, a few financially invulnerable types may be left standing for whom the price is irrelevant, but for most people, price and value are especially important now.” Surely this logic can be applied to the stock market too.
But the interesting thing is that we got into our current economic crisis because of a lack of foresight, and socially responsible investing necessitates farsightedness. SRI funds, such as the Domini 400 Social Index, match or outperform their market counterparts in the long run. And it makes sense if you think about it: Big oil stocks might be sky rocketing right now, but there’s no guarantee they’ll be able to keep up with the technology of the future. Conversely, socially responsible companies take into account their long-term effects on the environment and society at large.
So will the current financial crisis put an end to socially responsible investing?
Not for the investor who stays far enough ahead of the game.