Investing responsibly - Egea SRI

How to Start Investing Sustainably

Volunteering at a hospital, picking up litter, donating to racial justice organizations, and investing can all make a difference in the world. However, when it comes to making the world better, investing may not be the first thing that comes to your mind. The good news is that socially responsible investing is more profitable and attainable than ever. Once considered fairly radical, SRI is gaining increasing popularity. According to a 2019 survey, around 85% of investors have an interest in more sustainable investing. In this article, we’ll discuss what sustainable investing and green investing are, and how to start investing more sustainably with ethical companies.

What Is SRI?

Socially responsible investing, or SRI, is an investment strategy to generate both financial returns and social change for an investor. Socially responsible investments may include businesses that make positive social or sustainable impacts, such as a solar energy company, and may exclude companies that make negative impacts. An SRI can go by many names, including sustainable investing, values-based investing, and ethical investing. SRI can also stand for sustainable, responsible, and impact investing. Some socially responsible investing practices use a framework of social, governance, and environmental factors to lead investing.

What Is Green Investing?

green investing

Socially responsible investing and ESG are different from green investing. Green investing involves investors using their investment funds to back eco-friendly companies. These can be companies that have green policies in their daily operations or companies explicitly committed to developing renewable energy sources, conservation, and educating others about green initiatives. Green investing is a part of a larger investment strategy referred to as SRI. With SRI, investors use their assets to support efforts that align with their belief systems, such as social justice and sustainability. 

What Is Sustainable Investing?

Investing in a more equitable society and a greener planet sounds ideal on paper, but what does the practice of sustainable investing look like? Sustainable investing is an investment practice that takes into consideration an investment or a company’s impact on society and the environment. This type of investing aims to bring the investors positive financial returns while making a positive world impact. It often includes green energy investments, such as solar or wind. A sustainable investment strategy considers a given investment’s positive or negative impacts in addition to its financial return. These strategies can vary by a few different factors.

A sustainable investment strategy can mean a person investing a specific amount of money at a specific frequency into an ESG fund. A sustainable investment strategy can also mean researching each company the person or group intends on investing in to ensure that those companies have missions that align properly with the investor’s values. The performance of sustainable funds is often similar to that of traditional funds, and some research shows that sustainable funds can even perform better than traditional funds. Sustainable funds can offer investors less risk, even in crashing markets.

Considerations for Sustainable Investing

sustainable investing

Sustainable investing looks at what profits a company yields but also how it yields them. This focus involves a fundamental shift in how people view and value a company. A company’s activities can present both risks and opportunities. People starting to invest sustainably don’t only choose investments based on typical metrics but also on where a company’s practice aligns with its values. As such, how an investor defines SRI can vary somewhat from person to person. If you are an investor who is passionate about the environment, your investment portfolio will probably have at least some investments in various green energy sources. 

Similarly, If you care about women’s progress, and the advancement of people of color, you may have mutual funds investing in Black-owned businesses or hold stock in women-run companies. You may also find that some SRI funds match your values and other SRI funds do not. However, creating a more ethical portfolio need not be intimidating or difficult. You can build it with the help of a firm for value-based investing. With expert knowledge and investment assistance, the values-based investment professionals at Egéa SRI can help you uphold and support the values important to you with your investment dollars.

First Steps to Start Investing Sustainably

Among the first steps to start investing is to decide how much you want to invest. There are a few avenues when it comes to building an ethical portfolio. The majority of people prefer to invest sustainably when it’s possible. However, it can take some time to determine how committed a company truly is regarding ethical practices. You will want to outline what’s important to you and your investment dollars. It can be helpful to write down what you’re seeking in an SRI. Are there any deal-breakers or determining factors for which companies you want to invest in? Knowing this can then help you include or exclude a company.

Once you know your priorities and connect with a firm such as Egéa SRI to begin the official steps, you can start to build a portfolio that supports your interests. You can also review the ratings of a company you are considering investing in for how socially responsible they are. Individual stocks should usually not make up more than 5% to 10% of your portfolio, but you may want to include a company if you expect it will show strong growth in the future. You may also want to see how diverse the board of directors is, if they produce an accessible sustainability report, and how the employees grade the work culture on a third-party site.

Get Started Investing Sustainably With Egéa SRI

When considering how to start investing sustainably, consider your values and top ethical focuses when choosing companies to invest in, and continue to review your chosen companies for ethical practices and the presence of unethical practices. Have a good idea of how the companies operate but stay vigilant and adjust when necessary or desired. For help investing sustainably and successfully over time, connect with the professionals at Egéa SRI today.


Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice.  If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

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