The Impact of Ethical Investing

As more and more information is revealed about different companies and their business practices, consumers and investors are looking to put their money to work for them and their values. So-called ethical investing seeks to align different businesses and stock portfolios with an investor's politics and other beliefs about the world and how companies should be conducting their business.

Whether it's seeking ways to invest in alternatives to fossil fuels as outlined online or finding a clothing manufacturer that sources their materials in an environmentally-friendly way, there are dozens of ways that ethical investing is making waves on Wall Street and beyond. Here are just a few of the ways ethical investing is having an impact.

Religious Investments

Some investors avoid what people in the industry refer to as sin stocks as a way to continue practicing their religion and maintaining a lifestyle in accordance with these values. Examples of sin stocks include companies that manufacture guns or other weapons, as well as other activities that are deemed immoral such as gambling, creating pornographic entertainment, or selling alcohol.

It's important to note that just because someone chooses to avoid these kinds of companies on moral grounds doesn't always mean that the stocks chosen in their stead are likely to perform any better. Rather, these sorts of religious investments help investors feel like they aren't profiting off of industries that they don't want to support.

Environmental Investments

Choosing a company based on its environmental practices is another common example of ethical investing. In some situations, this means only investing in companies that are actively working to divest themselves from fossil fuels or that are seeking alternative sources of energy by avoiding crude oil and natural gas.

It's worth noting that not every company has made these switches in the present; however, an ethical investor may instead look to companies who are looking to reduce their reliance on fossil fuels over the next few years in an articulated plan against climate change. Even major companies like Ford, HP, and Disney have been identified as having great environmental initiatives, illustrating that there are well-performing businesses in the stock market who are also committed to renewable energy strategies and fighting global warming.

When in Doubt, Do Some Research

In the digital age, there are thousands of websites that can help you determine whether or not a business is one worthy of your socially-conscious investments. Many times, one of the best places to start your research is by looking at the company's website itself. From reading mission statements and taking a look at recent press and projects that the business is choosing to highlight, you can get a feel for a business' values pretty quickly.

Car manufacturers are a great example of this since many websites feature sections about environmental initiatives and other special projects. You may also want to learn more about how the company's C-level employees conduct themselves. For example, once you learn what a CFO is, you can learn how this individual's values are either aligned with or divergent from the company's mission and your own morals. If you need to corroborate any information you find on a company's website, Ethical Consumer is a great website to search for more information.

As you can see, there are a variety of ways to go about investing in companies in an ethical manner. Ultimately, it's important to take a look at more than just financial statements and key insights about interest rates and your return on investment if you want to be a socially responsible investor. That being said, if you want to take your investment game to the next level, a website like Rate Rush can help you immensely.

With financial strategies for those new to investing as well as articles about how to achieve financial freedom, there's a wealth of information on Rate Rush that makes it the number one finance blog on the web.