Investing is about growing your finances, but what if it could also help create a better world? That’s the promise of socially responsible investing (SRI), a fast-growing approach to building wealth while supporting companies that align with your values. By putting your money into businesses that prioritize societal good, you don’t have to choose between financial growth and making a difference.

Whether you're new to investing or looking to align your portfolio with your principles, this guide will walk you through the essentials of investing in companies that give back. From understanding the basics to taking actionable steps, you’ll gain the tools you need to make informed decisions that reflect your values.

What Is Socially Responsible Investing (SRI)?

Socially responsible investing focuses on putting your money into businesses and funds that prioritize ethics and sustainability alongside profitability. It allows investors to consider the "triple bottom line" of people, planet, and profit when choosing where to allocate their funds.

SRI includes investments in companies that:

  • Champion environmental sustainability by reducing carbon footprints or protecting natural resources.
  • Support social aims like diversity, equality, and community development.
  • Promote ethical governance with transparent management practices and fair treatment of stakeholders.

For many investors, SRI extends beyond profit margins. It’s about asserting that your dollars can influence positive change while building a solid financial future.

Why Do Investors Choose to Give Back?

People choose socially responsible investing for different reasons, but they often share a common thread: the desire to align their financial decisions with their personal values. Here are a few motivators:

  1. Making a Positive Impact: Many investors want their money to contribute to causes like renewable energy, gender equity, or accessible healthcare.
  2. Consumer Trust in Ethical Brands: Companies that prioritize social responsibility are often seen as stronger, more trustworthy, and more innovative.
  3. Long-Term Growth Potential: Sustainable practices often indicate long-term resilience. Companies attentive to environmental, social, and governance (ESG) factors are positioning themselves to adapt and thrive in evolving markets.
  4. Transparency and Accountability: Businesses with social responsibility initiatives tend to communicate more openly with stakeholders, signaling reliability to investors.

If you're motivated by causes like climate action, human rights, or community development, socially responsible investing offers a rewarding way to put your money to work.

Actionable Steps to Invest in Companies That Give Back

Getting started with socially responsible investing doesn’t have to be overwhelming. By following these steps, you can identify companies that align with your values and build a portfolio you’re truly proud of.

1. Understand ESG Ratings

Environmental, Social, and Governance (ESG) ratings are an essential tool for evaluating companies’ commitment to social responsibility. These scores assess how businesses perform in sustainable operations, ethical practices, and equitable management.

Steps to Use ESG Ratings:

  • Look for investment platforms or tools that provide ESG ratings for publicly traded companies and funds. Examples include Morningstar, MSCI, and Sustainalytics.
  • Compare companies in your industry of interest to gauge who leads in sustainability and ethical governance.
  • Research ESG-themed funds, such as ETFs (Exchange-Traded Funds) or mutual funds, that are built entirely from high-rated companies.

2. Explore Impact Investing Funds

If you’re new to investing or prefer a hands-off approach, impact investing funds simplify the process by pooling resources for positive change. These funds often focus on specific missions, such as clean energy, affordable housing, or gender-inclusive leadership.

Tips for Choosing the Right Fund:

  • Research the fund's missions and priorities. Make sure they align with what you care about most.
  • Consider the fund's financial performance and risk profile, balancing impact with growth potential.
  • Check out well-reviewed impact funds like the iShares ESG Aware MSCI USA ETF or Calvert Social Investment Fund.

Impact funds help you invest confidently while contributing to causes that reflect your values.

3. Review CSR Reports

Corporate Social Responsibility (CSR) reports are another way to gauge a company’s dedication to giving back. These reports detail a company’s efforts in areas such as sustainability, philanthropy, diversity, and ethical business practices.

How to Leverage CSR Reports:

  • Visit the investor relations section of company websites to access official CSR or sustainability reports.
  • Look for actionable data and examples, like carbon-reduction milestones, community projects, or charitable donations.
  • Compare these commitments to the industry standard and your own expectations.

Strong CSR practices can indicate a brand that’s genuinely committed to positive impact rather than engaging in "greenwashing."

4. Diversify Your Investments

Diversification is a key principle of any smart investing strategy, and it applies to socially responsible investing too. Rather than focusing on one company or cause, spreading your investments across multiple ESG-friendly businesses, sectors, and funds helps reduce risk while supporting various causes.

Ways to Diversify:

  • Invest in ESG-focused ETFs and mutual funds that cover multiple industries.
  • Include a mix of large, established companies and smaller innovative startups prioritizing sustainability.
  • Balance values-driven companies with broader growth-oriented investments for greater stability.

5. Partner with a Financial Advisor

Need help translating your values into an actionable portfolio? Consider working with a financial advisor who understands socially responsible investing. Advisors can help you integrate impact-driven choices into a broader investment plan tailored to your financial goals and risk tolerance.

Be clear with your advisor about your priorities. For instance, if avoiding investments in fossil fuels or tobacco companies is important to you, make that clear from the outset.

6. Stay Educated and Engaged

Finally, staying informed is crucial in maintaining a socially responsible portfolio. Industries, public concerns, and regulatory requirements all evolve over time, and so might your investments.

Ways to Keep Up:

  • Subscribe to newsletters or blogs focused on ethical investing.
  • Monitor updates and new initiatives from companies you’ve invested in.
  • Revisit your portfolio’s performance and alignment with your values regularly, making adjustments as needed.

Common Pitfalls to Avoid

Just like any other investment strategy, socially responsible investing comes with potential obstacles. Here’s how to sidestep common pitfalls:

  • Greenwashing: Avoid investing in companies that advertise lofty environmental claims without meaningful action. CSR reports and third-party ratings are your best tools for cutting through the hype.
  • Ignoring Financial Fundamentals: While values are essential, don’t overlook a company’s financial health. Make sure you’re supporting businesses with strong, sustainable growth prospects.
  • Overconcentration: Supporting the causes you care about is great, but too much exposure to one sector (like renewable energy or tech) can increase investment risk. Diversify to protect your portfolio.

Companies That Give Back

Salesforce (CRM)

  • Why it gives back: Salesforce pioneered the 1-1-1 model—donating 1% of its equity, 1% of its employees’ time, and 1% of its product to nonprofits and communities. The company also takes public stands on issues like equality and climate change.
  • Social impact bonus: Strong DEI (Diversity, Equity & Inclusion) initiatives.

Procter & Gamble (PG)

  • Why it gives back: P&G has a long history of community involvement and humanitarian aid, particularly in disaster relief and clean water efforts through its Children's Safe Drinking Water Program.
  • Social impact bonus: Large-scale global initiatives with tangible health benefits.

Alphabet (GOOGL)

  • Why it gives back: Google.org supports social causes like education, economic opportunity, and crisis response. Alphabet is also working to operate on 24/7 carbon-free energy by 2030.
  • Social impact bonus: Big investments in renewable energy and digital equity.

Unilever (UL)

  • Why it gives back: With brands like Dove, Ben & Jerry’s, and Seventh Generation, Unilever has a strong track record on sustainability, fair labor, and social justice. Its Sustainable Living Plan drives most of its business strategy.
  • Social impact bonus: Focuses on ethical sourcing and reducing plastic waste.