Investment is a major economic
factor, as it affects the economy, the financial health of individuals and the
general well-being of society.
Unfortunately, many investors
fail to invest responsibly due to a lack of knowledge and ethical standards.
However, conscious investing
is defined as the investment strategy of companies that focuses on human rights
and prioritizes environmental protection.
By doing so, investors can be
socially and environmentally conscious while making money.
Conscious investing focuses on
sustainable investing as it promotes social responsibility and human rights.
For example, one way to invest
responsibly is to avoid investing in companies that do not respect human rights
or exploit workers.
Investing in companies that
treat their employees and surrounding communities fairly shows concern for
others.
Investing responsibly also
means avoiding investing in industries that cause damage to the environment.
For example, avoiding fossil
fuel companies shows concern for the environment since burning fossil fuels
leads to climate change.
Companies that cause
environmental damage should not receive government subsidies;
Sustainable investing also
benefits society by creating jobs and increasing economic growth.
However, educating people on
good financial practices through sustainable investing makes people more
financially savvy, so they can make better investment decisions.
Therefore, investing sustainably creates jobs
for people who create sustainable products and services, such as solar panel
manufacturers, or implement sustainable systems, such as green buildings.
To be ethically responsible,
one must first learn about the social impact of companies. For example, some
companies produce toxic waste or contaminate water supplies when manufacturing
products, such as cars or soda cans, during manufacturing processes can be
hazardous to surrounding communities.
When researching companies,
one should also consult their corporate social responsibility report to see how
they treat their employees and surrounding communities when making decisions
about their company's investment portfolio.
Apart from this problem, some
argue that conscious investing is inefficient because many companies with
unethical morals make bad investments.
For example, many companies
produce toxic waste or contaminate water supplies during manufacturing
processes — like car manufacturing — that can be dangerous to surrounding
communities when making products like soda cans or parts automobiles.
Not only do these companies
pollute the local environment, but most fail to meet Wall Street expectations,
so investors lose money when they expect positive returns on their investments.
Investors lose money when they
expect positive returns on their investments, as some unethical companies
underperform and lose money over time when they produce toxic waste or
contaminate supplies in local water.
If a company has a history of
being accused of toxic waste spills or contaminated drinking water supplies, it
is best not to invest in their industry unless there are no negative press
reports regarding the company researched online.
On the other hand, if there
are no negative press reports about a company producing toxic waste spills or
contaminated drinking water supplies, despite numerous accusations over time.
Then it is prudent to assume
that this company is committed to responsible business practices to employees
and surrounding communities, that their actions are underperforming financially
over time.
