How to Invest in Socially Aware Companies

Investing in socially responsible companies is an excellent way to earn money for yourself and your family while also helping companies do good for others or work on new technologies. The best way to begin building this type of portfolio is to research these companies first.

Difficulty: Moderate

Instructions

1. Determine what you define as "socially responsible" companies. Some people believe that certain industries, such as tobacco and pornography, are not socially aware. Others consider companies socially aware if they are promoting environmental products, gender equity or other social issues. Know what your definition is and where you limit your support.

2. Watch news about companies' performance or employment issues. Large corporations, such as Wal-Mart and Coca-Cola, have been in the news for employment discrimination and other problems. Becoming aware of these types of news stories will help you understand various companies and their social action.

3. Research companies you come across in your daily life. If you go to Starbucks every morning, search out information about Starbucks and its ethics. Read through information with an eye for how reputable a source is.

4. Check sources that monitor this information. Many print and online media companies give out information about socially responsible and irresponsible companies.

5. Seek out news about companies looking for new alternatives. Many times socially responsible investing guides will point out companies that may not be considered wonderful choices otherwise. An oil company pushing research on energy efficient fuels, for example, may qualify. Keeping up with news sources on these companies can give you valuable information.

Tips & Warnings

• Financial advisers can give you good insight on the trends in various industries and can be valuable in helping find socially aware companies.

Resources

• Keep up with news on socially responsible investing.