Natural Investing for Personal and Social Well-Being

The social, ethical and spiritual dimensions of money.


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Turn on any financial talk show and you will be deluged with advice about how to make more money. You’ll learn which kind of retirement plan is best for you, and hear arguments about the pros and cons of no-load mutual funds. This is useful information, but it doesn’t go far enough. Given the central, powerful role of money and business—in both our society and personal lives—it is astonishing that so little attention is given to money’s social, ethical, and spiritual dimensions. Even the most caring commentators seem oblivious to the enormous impact that our financial decisions exert on communities, the earth, and our individual peace of mind. Our money carries our voice to the world, a fact we often ignore.

Natural Investing is the latest chapter in the age-old story of people seeking to integrate their money and their values. As early as the sixteenth century, Quakers refused to invest in ­slavery because it clashed with their belief in the equality of humankind. However, it was not until 1928 that Christians formalized the first social investment policy, in the Pioneer Fund, established to serve church groups and investors who wanted to avoid supporting “sins” such as alcohol, tobacco, gambling, and weapons. The 1970s saw the launch of SRI—Socially Responsible Investing—as such issues as the Vietnam War, the environment, and apartheid galvanized private and institutional investors.

Today, people of all income levels, from across the entire political spectrum, are using the tools of Natural Investing to find profitable investments. Natural Investing avoids some of the contentiousness that arises from the term “socially responsible,” which can make others feel they are being labeled irresponsible. Natural Investing simply encourages investors to identify their ethical values and to consider them when making financial decisions.

For most people, this approach does, indeed, feel quite natural. For example, a 1996 survey of mutual fund investors found that 83 percent want their financial adviser to understand their concern for social and environmental issues before making an investment recommendation. According to the Social Investment Forum, well over a trillion dollars of today’s investments—one-tenth of all investment ­dollars—rely on some sort of ethical criteria. Nearly every mainstream ­investment option now has a values-based equivalent.

The Wheel of Natural Investing

The “Natural Investing Wheel” maps the four major strategies that Natural Investors use to bring their values into the financial world.

Avoidance Screening is the familiar method of choosing not to invest in industries by which you do not wish to profit; tobacco, weapons, and environmental pollutors are some of the many commonly-used screens.

Affirmative Screening, also called “prospecting,” seeks out investments in activities that investors do want to support, helping to implement their vision of a positive future in the world. This investment approach can focus on leading-edge companies in emerging fields like alternative energy and natural foods; it may include large companies, even government agencies, that are addressing investors’ concerns. Many prospectors buy stock in companies that demonstrate a high level of commitment to their workers, their communities, or the environment.

Community Investing. This rapidly emerging branch of Natural Investing is especially useful for getting your money into the hands of grass-roots programs and economically marginalized people, locally or globally. Community Investing initiatives include affordable housing, small business lending, targeted investment in both urban and rural areas of the United States, and microenterprise development throughout the world. It is an excellent way to put savings to work and provide a “hand up” to those who need access to capital.

Shareholder Activism. This potent strategy provides a means for changing companies from the inside. Shareholder activists have a wide range of available tools, including dialogue with companies on issues of concern and sponsorship of shareholder resolutions. These methods achieved stunning results in the campaign to end apartheid in South Africa and are now being applied to a wide range of foreign and domestic concerns such as sweatshops and excessive executive pay.

Natural Investing begins with the awareness that our choices regarding money make a powerful statement about our personal values and exert strong consequences in the world. Starting on this path does not require a lot of money—many screened mutual funds and community banking options welcome investors who can start with as little as $50.

Natural Investing does mean that one must follow both head and heart when designing an investment strategy. All the basic financial planning tools still apply, including responsibility to self and family. But Natural Investors are willing to take on the earnest soul-searching needed to bring values into the financial world. Before investing, take some time to decide on your own social, ethical, and environmental priorities, and learn how to support your most important issues. Start out slowly, perhaps focusing on one issue that you feel strongly about, or test the waters by converting a portion of your portfolio into values-inclusive investments.

Another exciting aspect of Natural Investing is the fact that the methods for integrating one’s money and values can be applied to much more than investing. Virtually all aspects of our financial lives, including working, spending, and giving, can benefit from an awareness of our core beliefs. Ultimately, the cumulative effect of millions of people bringing values into the global economy offers our greatest hope for the future.

The world today reflects the unnatural separation of money and values. The United States is the richest country ever, and material progress has brought immeasurable benefits to the world. But the pursuit of wealth-at-any-cost is also responsible for human suffering, gross inequities in the distribution of this wealth, and environmental devastation. If we are to fulfill humanity’s potential as stewards of a healthy, prosperous planet, each of us must connect with the seeds of our own natural desires and plant them smack dab in the middle of Wall Street and our entire economic system. As we learn to make money and make a difference, we enrich our own lives while we bring essential human values back into the core of our society. nNH

—Hal Brill, Jack A. Brill, and Cliff Feigenbaum

Adapted from Investing with Your Values: Making Money and Making a Difference by Hal Brill, Jack A. Brill and Cliff Feigenbaum. Copyright © 1999, Bloomberg Press.
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