If we start believing the detractors of Global Climate Change – we would start questioning our own perception of the whole climate change rhetoric. But things on the ground aren’t as rosy as the picture that is put in front of our eyes almost all the time; a picture that tells us that our activities aren’t insalubrious to the environment, and we could march ahead with all guns blazing.
In reality, it’s imperative to be socially conscious of the wide and varied changes that are taking place in and around us, and we should be willing to take definitive and stipulated steps to counteract the effect of these changes – in an attempt to make the world a better place both for us and our coming generations.
This debate has become even more conspicuous with the restarting of the socially responsible investing debate by the Netpicks group. There are many takeaways from the eloquently put points that have been envisaged by their team, and are worth incorporating in our own investing forays.
According to the points put by Netpicks in an unbiased fashion: if we are to see the world that takes a turn for the better and not for the worse, then there are some environmentally conscious decisions that we ought to indulge in – the primary one amongst them being managing our investments and portfolio in a more socially conscious way, and ascertaining that we contribute towards the betterment of the world, in turn reducing risk to our own person.
What are ETF’s?
ETFs are Exchange traded funds, structured more or less in a similar fashion to mutual bonds. The one unique aspect that differentiates one from the other is their trading process, wherein ETF’s are traded just like stocks, that is in a passive manner, while mutual bonds, as we are already aware, are traded in a more active and aggressive manner.
So, as has been enunciated in a deft manner by the Netpicks article, the growth and increase in popularity of the ETF led to a gargantuan increase in the whole market. Now, the ETF’s that are favorable and worth buying have to be the socially responsible ETF’s – the reasons for which we are already well aware of!
We are already aware of the fact that to increase the maximum return on investment in ETF’s they should be left as is for a long duration, same is applicable for the socially responsible ETF’s.
Also, another point worth considering is the attribute that SRI ( Social Responsible Investing ) pertains to investing a lion’s share of our investments into companies that rate high either on the social, moral or ethical quotient. Hence, companies that procure a major share of their revenues from pandering to the lowest denomination in the form of selling drugs, tobacco, and alcohol are usually extricated from one such portfolio investment.
According to Netpicks, to make socially responsible ETF’s a resoundingly unprecedented success for ourselves, there are some steps that could be followed – as have been enshrined in a clearly worded paragraph by the US SIF ( The U.S. Forum for Sustainable and Responsible Investing ). The points have been alluded to below:
1. Positive Screening of Companies: This involves the systematic inclusion of companies into the ambit of investment based on their ESG (Environmental, Social and Governmental ) parameters – or their social sanity quotient, especially choosing companies that tend to stay far away from any unwarranted controversies.
2. Negative Screening: This involves the irreproachable exclusion of companies from our portfolios based on their proclivity to create controversies with each and every step of theirs – usually companies that are rated quite low on CSR parameters.
3. The commingling and integration of factors pertaining to ESG in the final financial analysis.
4. Investment based on themes: Choosing companies based on the themes that they tend to adhere to, like social justice, alternative energy, good practices etc. and inadvertently avoiding companies that deal with addictives and other socially detrimental substances.
Based on the above parameters, Netpicks ended up with their top picks – which we would be citing below:
1. Etho Climate Leadership U.S. ETF (ETHO):
This venture focuses on companies with the least carbon impact within the ambit of their own sector.
2. iShares MSCI KLD 400 Social ETF (DSI):
This venture strictly focuses on companies that are proactive in making positive environmental and social changes.
3. SPDR SSGA Gender Diversity Index ETF (SHE):
This venture has a bird’s eye focus on companies that are leaning towards increasing gender parity within their industries and also striving to maintain most diversity at top positions.
4. iShares MSCI ACWI Low Carbon Target (CRBN)
It aims at targeting the investment results of indexes that compose of large and also mid-capitalization equities that enjoy a lesser carbon footprint then their broad market compatriots.
Netpicks has put out a lot of valid point concerning the social responsibility that we as a generation have to bear, this would aid us in making the world a better place to live in, all the while diversifying our asset portfolio and making a positive social impact. They have quite stuck to the moniker, “Change starts from within”; and if followed in the essence of the words, then the mighty potential of social change is bound to show up within a reasonable duration.
About Netpicks – An online trading Strategy Company
All great things start small, and same is the case with Netpicks. They started way back in the year 1996, and since then, have literally turned into the gold standard for trading related education. Furthermore, the portfolios that they monitor are quite diverse, ranging from forex all the way to ETF’s. They have decided upon furthering the knowledge of traders in the regular market, and aid them in achieving success in this world of one-upmanship and cut-throat competition.
Furthermore, they have a wide array of articles written by their highly competitive team of experts, who are actually aware of what they are doing and doesn’t believe in misleading their clientele down a path full of darkness, stress and unwarranted despair. Also, as could be seen from the article, they have an emotional attachment to the environment and have been working meticulously towards saving it, one way or the other.
More here in this interview with Netpicks’ CEO, Mark Soberman.