How Do Socially Responsible Investment Funds Operate?

Socially responsible investment funds are a good way for investors to make a difference in the world. The idea behind a socially responsible investment fund is that it chooses its investments based on whether a company is socially responsible or not. By funding socially responsible companies, the investment fund hopes to better the condition of the world overall.

Types of Socially Responsible Investing

One of the most common areas that socially responsible investment funds focus on is the environment. Many of these funds will invest a majority of the money that they have into companies that put an emphasis on protecting the environment. 

Another common type of socially responsible investing is focusing on companies that produce alternative forms of energy. These companies are focusing on trying to get away from a global reliance on fossil fuels.

Choosing Investments

Whenever a traditional mutual fund chooses its investments, it only has to look at whether the investment is going to be profitable for the investors or not. Socially responsible investment funds have to decide whether an investment is profitable and they have to look at whether the business practices of the company are responsible.

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