When I came across NuWire Investor’s article on socially responsible investing, I thought it was an accessible introduction to the subject. Trevor Winnie gives a great overview of the benefits, as well as critiques, of this increasingly popular and influential field.
What particularly stood out to me was the breakdown of the three fundamental approaches socially responsible investment managers use to “invest in a more sustainable and humane society.” I began to think beyond the socially responsible investing of financial capital, and thought about applying these strategies to evaluating investments in human capital. More to the point, I thought these same strategies might be useful to anyone interested in a more socially responsible career.
With that in mind, I’ve listed the approaches and how they could be applied in a career context.
Screening is the practice of filtering possible investments through evaluation of a company’s compatibility with criteria used by a specific fund. Some funds focus on environmental issues and others on labor conditions, while many use a wider scope and require a general history of corporate social responsibility. It is still the job of the manager to achieve desired returns while managing risk, but some promising investments will surely be omitted if they can’t meet the relevant standards.
When making a next step along your career path, you (hopefully) already do a bit of “screening.” For many it’s a matter of evaluating location, salary, benefits, vacation days and work-life balance, among factors. If you’re interested having a career with a triple bottom line, then once salary and the above are considered, you may want to decide to don a socially responsible, green collar career.
Shareholder advocacy takes a proactive line of attack to responsible investing. In contradiction to screening strategies, those practicing shareholder activism often invest in unethical companies, hoping to bring about positive change through shareholder resolutions. This process can raise awareness of specific issues and create dialogue with management that otherwise would be nonexistent.
Maybe you’re already invested in your office, enjoying your role and your colleagues, but the fact your company isn’t working toward a triple bottom line disheartens and maybe even upsets you. If you’re up for a challenge, creating changes toward sustainability for your company can have an even greater impact than finding a job with an existing and exemplary blended value organization. Applying a “shareholder advocacy” approach moves beyond preaching to the choir to spreading the sustainability gospel to those most difficult to reach. With professional relationships already in place, you have greater potential to influence your company, particularly if you can back up your green-colored views with data that preserves or improves the financial bottom line.
Community investing is an effort to direct capital into neighborhoods often overlooked by traditional financial services. This approach focuses on issues such as affordable housing, small business creation and development of community facilities. For individual investors, holding cash with financial institutions dedicated to community development—such as credit unions, local savings and loans and development loan funds—can provide competitive returns while helping support economic growth in areas shunned by capitalism. For institutional investors, participation could come in the form of venture capital funding or ownership of real estate, such as low income housing.
I’ll take some liberty in applying this last strategy. I interpret SRI “community investing” in the career context as starting up your own enterprise where, as a social entrepreneur, you take an innovative approach to solving social and environmental problems. These new and untested ideas often face trouble getting support from traditional philanthropies. With such social ventures or venture philanthropy, you intend to make a return that makes a difference, yielding greater results than more conservative philanthropic efforts.
The strategies of screening, shareholder advocacy, and community investing are representative of different types of workers, which I would classify as green collar workers, sustainability change agents, and social entrepreneurs, respectively. Don’t get caught up in the “green” versus “sustainability” versus “social” terminology–for simplicity within this post, I view all as working toward a triple bottom line. The real distinction among the three is the decision to change a job, a company, or an industry (and community).
Out of curiosity, what kind of a worker are you or do you aim to be: green collar worker, sustainability change agent, or social entrepreneur?