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Socially Responsible Investing (SRI)

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Socially Responsible Investing (SRI)

Socially Responsible investing (SRI).   Sustainable investing.  Environmental, Social & Governance (ESG) investing.  Impact investing.  Whatever you call it – and however you define it – the desire to manage investments in a way that aligns with personal values continues to grow. 

According to a report from the Forum for Sustainable and Responsible Investment, the market size of sustainable, responsible and impact investing in the United States in 2016 was $8.72 trillion, or one-fifth of all investment under professional management. Since 1995, when the US SIF Foundation first measured the size of the US sustainable and responsible investing market, to 2016, the SRI universe has increased nearly 14-fold, a compound annual growth rate of 13.25 percent.

SRI has been around since the 1970s but over the last 40+ years it has evolved.  Initially, the approach was to avoid investing in companies whose products or services were considered objectionable – for example tobacco or companies cited for child labor practices.   However, the trend these days is less about screening out the bad, and more about placing an emphasis on companies who are doing good in the world, and using investments to drive social change.

The continued growth in this type of investing is being fueled by many factors – including an ongoing transfer of wealth to women and millennials, and the increased demand for values-aligned offerings means that there are more solutions to choose from as this approach becomes more mainstream.

DHG Wealth Advisors has been offering a sustainable portfolio for several years, and we continue to explore ways to enhance our sustainable investment offerings. For more information on our sustainable portfolios, please reach out to your local advisor.

To learn more about the different ways to approach values-aligned investing in general, please click here.

For more information on trends in this space, please see the 2016 Report on US Sustainable, Responsible and Impact Investing Trends.

And later this month tune into our podcast, DHGWA Insights, for a special interview with Marcus Axthelm, Senior Portfolio Manager and Vice President at Dimensional Fund Advisors, who is part of the team that develops and manages Dimensional’s sustainability funds.