MN Makes Waves in Socially Responsible Investing
Thursday, May 12, 2022
Higher consumer prices are dominating financial headlines, but an investment trend is making noise. It encourages putting money into causes that provide a social benefit, and this movement gaining steam in Minnesota.
Socially responsible investing is coming off a record year, with nearly $650 billion flowing into these funds.
Casey Shultz - director of investor relations with the Saint Paul & Minnesota Foundation - said in the world of philanthropy, it can mean shifting a portfolio away from fossil fuels to clean energy.
She said it doesn't have to just involve larger institutions. Separately, smaller investors can jump in.
"We're in a really lucky time where there are so many more investment vehicles being offered," said Shultz. "So, there truly is an opportunity for any type of investor - whether that's you as an individual or going all the way up to larger pension funds or other institutional investors. "
On a larger scale, the Foundation recently became the first community foundation in the U.S. to sign on to the Principles for Responsible Investment network, which is backed by the United Nations.
Research has shown this type of investing results in strong financial returns, but some analysts warn to be wary of companies who pledge responsible actions, but fail to follow through.
Shultz echoed the sentiments of researchers who suggest sustainable investing can be a good business decision. She predicted that this will be more of a factor as governments around the world craft policies meant to address climate change.
"We're looking at companies that are forward thinking," said Shultz, "that they see these regulations that are coming and they're like, 'Oh, we better start making investments to address this now so that it's not a huge financial burden down the line.'"
At the end of the day, she said this approach shapes a better future for the nonprofits the Foundation works with. She said they already started going this route before joining the UN PRI movement this spring, pointing to their community investment fund, which accepts individual donations.
A 2020 analysis from Arabesque Partners found that 80% of sustainability business practices have a positive influence on performance.
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