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# Review of Socially Responsible Investing Tools
As socially responsible investing (SRI) continues to gain traction, the demand for tools helping investors to align their portfolios with their values grows. These tools not only offer the opportunity to invest in companies performing well in environmental, social, and governance (ESG) issues but also help avoid those that don’t meet specific ethical criteria. This article reviews the leading socially responsible investing tools available to both novice and seasoned investors looking to make a positive impact with their investment dollars.
Understanding Socially Responsible Investing
Before delving into the specific tools, it’s crucial to understand what socially responsible investing encompasses. SRI involves considering both financial return and social/environmental good to bring about social change regarded as positive by proponents. It’s a strategy that tries to consider both the investor’s financial needs and an investment’s impact on society.
Criteria for Evaluating SRI Tools
When reviewing SRI tools, several criteria are essential for effective evaluation:
– **User-Friendliness:** How easy it is for investors to navigate and use the platform.
– **Comprehensiveness:** The range of SRI options available, including ESG scores, impact investments, and more.
– **Transparency:** How transparent the tool is about its scoring methodology and the investments it includes or excludes.
– **Cost:** The fees associated with using the tool or making investments through the platform.
Top Socially Responsible Investing Tools
The following tools stand out in the crowded SRI space for their robust features, user-friendly interfaces, and commitment to helping users invest according to their values.
Betterment Socially Responsible Investing Portfolio
Betterment, a popular robo-advisor, offers a socially responsible portfolio option designed to achieve competitive returns while prioritizing social responsibility. It focuses on low-cost ETFs that score high on environmental, social, and governance criteria.
Wealthsimple Socially Responsible Investment Portfolios
Wealthsimple provides a curated selection of socially responsible investments that prioritize companies with lower carbon emissions, as well as those that excel in social responsibility and corporate governance. Their portfolios are diversified across different asset classes and geographies, allowing for broad exposure.
Aspiration
Aspiration offers banking and investment products that empower users to make a difference with their money. Notably, their investment options include funds that are fossil fuel-free, and they donate a portion of their earnings to charitable causes.
Investing with a Robo-Advisor vs. Using Screening Tools
Robo-Advisors
Robo-advisors like Betterment and Wealthsimple provide a hands-off approach to socially responsible investing by offering pre-built, diversified portfolios that adhere to SRI principles. This option is great for investors looking for a straightforward way to align their investments with their values without needing to dive deep into individual stock analysis.
Screening Tools
For those who prefer a more hands-on approach, various screening tools are available that filter investments based on specific ESG criteria. These tools often provide detailed reports on companies or funds, allowing investors to make informed decisions based on their personal values and investment goals.
Final Thoughts
Choosing the right socially responsible investing tool depends largely on your investment style, the level of involvement you want in the selection process, and your specific values. Whether you’re looking for a hands-off robo-advisor experience with SRI portfolios or prefer the control that comes with using screening tools to select individual investments, the market offers plenty of options to help you invest responsibly. As the world of socially responsible investing continues to evolve, so too will the tools designed to facilitate it, promising a future where investing for good is accessible to all.