# Review of Socially Responsible Investing Tools
In an era where investors are increasingly seeking to align their financial goals with their personal values, socially responsible investing (SRI) has gained significant momentum. SRI allows investors to contribute to societal well-being and sustainability while also pursuing financial returns. As interest in SRI grows, a variety of tools have emerged to assist investors in making informed decisions. This review will explore some of the key tools available for those looking to embark on or enhance their socially responsible investing journey.
Fund Screening Platforms
One of the primary ways investors can engage in socially responsible investing is through mutual funds or ETFs (Exchange-Traded Funds) that focus on SRI principles. Fund screening platforms help investors identify these funds based on their social, environmental, and governance (ESG) criteria.
Morningstar Sustainability Rating
The Morningstar Sustainability Rating is a robust tool that helps investors assess the sustainability profiles of mutual funds and ETFs. It rates funds from 1 to 5 globes based on how well the companies in the fund’s portfolio are managing their ESG risks and opportunities compared to peers.
MSCI ESG Ratings
MSCI is another influential player in the SRI field, providing ESG ratings for thousands of companies and funds. Its ratings range from leader (AAA, AA), average (A, BBB, BB) to laggard (B, CCC), enabling investors to gauge the ESG performance of their investments.
ESG Data Providers
For direct investors in stocks or those who wish to delve deeper into the ESG aspects of individual companies, a range of data providers offer detailed analysis and ratings.
Sustainalytics
This global leader in ESG and corporate governance research provides comprehensive reports on the sustainability performance of companies. Investors can access detailed ESG risk ratings, which include an assessment of unmanaged ESG risk.
Bloomberg ESG Data Service
Bloomberg offers an extensive database of ESG data covering thousands of companies worldwide. This service provides data points on environmental, social, and governance issues that are critical for making informed SRI decisions.
Impact Investing Platforms
For those interested in directly funding projects or companies making a positive social or environmental impact, impact investing platforms offer a convenient gateway.
GIIN (Global Impact Investing Network)
GIIN is a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing. It provides resources, including a searchable database of impact investments, making it easier for investors to find opportunities aligned with their values.
Kiva
Kiva is an online lending platform that allows individuals to make microloans to entrepreneurs in developing countries. It’s an excellent example of how retail investors can engage in impact investing with relatively small amounts of money.
Robo-Advisors for SRI
Robo-advisors have also embraced socially responsible investing, offering automated investment services that create SRI portfolios.
Betterment
Betterment, one of the leading robo-advisors, offers a socially responsible investing portfolio that focuses on low-cost ETFs with strong ESG practices.
Wealthsimple
Wealthsimple provides an SRI portfolio option that emphasizes securities meeting rigorous ESG criteria. It combines global diversification with the goal of maximizing returns underpinned by ethical principles.
In conclusion, a growing array of tools is available to investors looking to pursue socially responsible investing. By leveraging these tools, investors can align their portfolios with their ethical beliefs without compromising on financial returns. As the SRI field evolves, it’s expected that even more innovative tools and platforms will emerge to facilitate ethical investment practices.
