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Making Responsible, Values-Aligned Investments
As individuals, we are mindful of acting on our purpose and defining a positive legacy. As investors, it need not be different.
Your investments can indeed make a big difference on the issues you care about.
With greater access to investment options and information about them, you can choose investments that align with your values.
The PRI defines responsible investment as a strategy and practice to incorporate environmental, social, and governance (ESG) factors in investment decisions and active ownership.
Essentially, you make investments that align with your values. Examples include investing directly or in stocks of environmentally friendly companies (mobility, food, fuels), ethical brands, companies that create measurable progress around SDGs.
So, how does one go about value-aligning your investments?
- List and prioritize issues/values you are passionate about. This will also help you eliminate certain types of investments. For example: supporting smaller businesses v. larger ones, supporting egalitarian products over premium ones, fair trade companies over others etc. This is also a good way of creating a negative list of businesses you wish to avoid.
- Evaluate your current portfolio across these values and switch to investment options that match them.
- For new investments, find out how they generate returns and what the primary outcomes of the business are.
You can also choose from readymade and sometimes obvious options - such as a sector specific or ESG mutual funds, climate friendly companies and platforms such as IndiaP2P that enable business and income-enhancing loans to women.
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