For most affluent investors, socially responsible investing means avoiding companies that are not being socially responsible in their investment products, according to a new Spectrem survey.
Socially responsible investing encompasses an estimated $3.07 trillion out of $25.2 trillion in the U.S. investment marketplace, according to US SIF, the Forum for Sustainable and Responsible Investment. These types of investments encourage corporations to improve their practices on environmental, social and governance issues.
According to the Spectrem study, the highest percentage of affluent investors (85 percent) regard socially responsible investing as investing in environmentally friendly investments or companies, the survey found. Almost two-thirds of respondents consider it to be investing in companies that support a specific social cause.
The remaining responses were focused on the kinds of companies whose products or practices they would not want to encourage. Almost three-fourths (71 percent), for example believe socially responsible investing is not investing in companies that manufacture their products in countries where human rights violations occur.
Six-in-ten of affluent investors would not invest in companies or investments that manufacture or promote tobacco, while 58 percent would consider it an investment deal-breaker if a company manufactured or promoted pornography.
Forty-two percent of respondents would not invest in companies that manufacture or promote personal use weapons, such as guns. A near-equal percentage (40 percent) believes that socially responsible investing means not investing in companies or investments that sponsor or promote gambling. Thirty-seven percent feel similarly about companies or investments that use animals in testing their products, while 32 percent believe that social responsible investing means not investing in companies that manufacture or promote alcohol products.
Socially responsible investing does not seem to be a priority with affluent investors. Nearly seven-in-ten said that a company’s support of charitable causes does not influence or impact whether they choose to invest in that company.
Almost all (93 percent) said that, personally, they do not buy products from a company primarily because of their support for a charitable cause.