Natural Investing for Personal and Social Well-Being

The social, ethical and spiritual dimensions of money.

| July/August 1999


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.

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