Do you want to invest with a socially responsible cause?

Since I am NOT an expert in socially responsible investing, I thought I’d as one of my fellow NAPFA financial advisor members to talk about the subject. Socially responsible investing is, after all, becoming more and more popular.


Socially Responsible Investing

Socially responsible investing may be a great way to feel good about your investments

Invest socially responsible and feel good about your capital!

Bill Holliday is a fee only financial advisor and asset management professional with AIO Financial in Tucson, Arizona.  Before starting his financial planning firm in 2004, he worked in Nicaragua and Mexico setting up charitable micro-finance organizations. Bill is a Certified Financial Planner™ and the Director of ProMex Group (charitable micro-finance).

Bill’s specialty is Socially Responsible Investing (SRI).  Here are some of Bill’s thoughts and experiences:


First off – thanks Greg for allowing me to guest write for you.

SRI (also known as sustainable, socially conscious, and ethical investing) continues to grow at a faster pace than conventional investment assets under professional management.  The $3.07 trillion of U.S. SRI investments use at least one of the three socially responsible investing strategies:

1.  Using positive and negative filters to select investments based on environmental, social and governance (ESG) factors (screening)

2.  The filing or co-filing of shareholder resolutions on ESG issues shareholding advocacy

3.  Investments in micro-finance organizations, banks, credit unions, venture capital funds and loan funds that have a specific mission of community investing


ESG Incorporation (screening)

SRI mutual funds make up the largest share of funds using ESG factors with $320 billion in assets in 250 different funds.  There are 26 ETFs, five close-end funds and 177 alternative investments incorporating ESG criteria.


Shareholder Advocacy

A wide array of investors now file or co-file shareholder resolutions at US companies on ESG issues and hundreds of these proposals come to votes each year.  If investors do not vote, management has the right to vote for those shareholders.  For investors in a mutual funds – you give voting rights to the fund manager. Two easy ways to participate are to invest in mutual funds that share your values and participate in shareholder advocacy or through voting on your individual stocks.


Community Investing

Assets in community investing institutions increased more than 60% in the past 3 years.  It has become easier to invest directly with a micro-finance institution or in a pool of institutions and there are many community investment banks credit unions.

The major reasons for SRI growth are:

  • client demand,
  • institutions (particularly public funds) incorporate ESG criteria because of legislative mandates,
  • the availability of new funds and products,
  • regulatory developments and investor services that make proxy voting easier, and
  • the growth of community investing.


I have written more about Socially Responsible Investing on in several blog postings that you can access from my web site.



Thanks Bill for a quick breakdown on socially responsible investing!  Greg