Menashe Morley Group

New Trends in Socially Responsible Investing

By Surya Kolluri, Managing Director & Head of Channel Programs and Delivery

Merrill Lynch Wealth Management

Posted on November 10, 2016

In past years, socially responsible investing focused mainly on negative screening. Negative screening involves using investors’ environmental, religious and personal values to determine which securities to keep out of their portfolios. Today, a more positive approach to socially responsible investing is steadily growing more popular.

Investors should consider companies with strong fundamentals when weighing socially responsible investing, as well as seek out corporations that earn revenue through their management of human capital, environmental stewardship, and good corporate governance. 1 Socially responsible categories offer investors an opportunity to combine competitive investments with their personal values.

“Gender lens” investments focus on improving the lives of women and girls and are often a good indicator of valuable human capital management. In many cases, companies with progressive policies toward gender equality are well-run and frequently recruit and retain
top talent.

Environmental stewardship examines the use of alternative energy, climate change, clean tech and water. Companies focused on sustainable efforts will often subsequently be rewarded with cheaper operational costs. Ultimately, the investor may benefit if a company’s cost saving technology produces a higher profit.

It is important for socially responsible investors to understand how a company operates. Corporate governance focuses on disclosure, incentives, reporting and corporate transparency. The trend of values-based investing is changing the wealth management space and creating a new, more active approach to social investing.

There is a growing awareness that strong corporate financial performance and social responsibility are not mutually exclusive; rather, they are mutually beneficial qualities.   With a balanced approach, you have the potential to make impactful investments. Work with a financial advisor who understands your long-term needs and investment personality but also understands what you value most.

For more information, contact The Menashe Morley Group in the Rancho Santa Fe office at 858-381-8113. The Menashe Morley Group, serving the community for over 30 years: David Menashe is a Senior Vice President and Wealth Management Advisor, Bruce Morley CRPC is a First Vice President and Wealth Management Advisor and John Naviaux CPWA is a Vice President and Wealth Management Advisor for Merrill Lynch, Pierce, Fenner & Smith Incorporated. This article is designed to provide general information about ideas and strategies. It is for discussion purposes only since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax, or estate planning strategy. Merrill Lynch makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a registered broker-dealer and member SIPC, and other subsidiaries of Bank of America Corporation (“BofA Corp.”). Bank of America Corporation (“Bank of America”) is a financial holding company that, through its subsidiaries and affiliated companies, provides banking and nonbanking financial services. Investment products: Are Not FDIC Insured, Are Not Bank Guaranteed, and May Lose Value. Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

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1 Jason Baron “What is Socially Innovative Investing? “The Search for Companies that Do Good and Do Well”, May 2012.

Menashe Morley Group

Menashe Morley Group

Photo Caption: Menashe Morley Group

Photo Credit: Photo by Jennifer Nelson