Entrepreneurs are constantly looking for new ways to grow their companies, and many may overlook some areas in which there are opportunities for growth. When seeking opportunities for expansion, some business owners may neglect to consider socially responsible investing as a significant driver of enterprise development.
Socially Responsible Investing (SRI) has emerged as a way for entrepreneurs to invest in their operations and see company growth as a result. As corporate social responsibility has become a more prevalent concern among firms and their clients, it is more important for enterprises to be up to date on the latest strategies when it comes to green investing, as they can prove an effective business builder.
How Can Firms Implement SRI?
When companies decide to make SRI a part of their business strategies, they often forego working with industries or organizations that are known for human rights abuses, contribute to pollution or violate traditional norms. Environmental, social and corporate governance (ESG) are all taken into account when looking into Socially Responsible Investing. By selectively screening for and investing in companies that are known for their strong commitments to social or environmental issues, consumer protection and diversity, advisors can ensure their firms are a part of this growing trend.
While it’s not a religious, moral or political platform, it’s often spurred by a desire to do something that will benefit multiple communities and the environment as a whole. It can not only have the desired effects, but enhance business growth, as well.
As social responsibility issues are increasingly brought to light among advisory firms, more individuals look to support them and make this cause a part of their lives. Indeed, some may see it as their own obligation. There are indications asset owners are increasingly interested in SRI, in addition to typical sustainability concerns, and believe it their duty to ensure investments are aligned with these values. This shareholder advocacy is leading many firms to change their current strategies and take more interest in the subject. Forbes revealed that in the last two years, Socially Responsible Investing has grown by more than 22 percent to $3.74 trillion in total managed assets.
Report Indicates Sustainable Investments Prove Effective
In a new report from Green America, EcoVentures International and the Association for Enterprise Opportunity it was revealed that typically, the greener a company is, the stronger its revenue will be. Eighty-four percent of those who took the time to invest in green strategies claimed they saw more transactions as a result. Those who invested more heavily in this trend also saw stronger performance in nearly every dimension tested, according to the report, which indicates the strategies may pay off in more than one respect.
Entrepreneurs are slowly realizing the importance of green investments, and more are taking the time to research initiatives and implement new practices throughout their firm. The research found 79% of small-business owners surveyed strongly agreed turning to sustainable investments gave their company a competitive advantage, and 75% claimed they wanted to expand upon their current green processes.
“In the three decades since Green America first started promoting sustainable practices in business, the market has clearly shifted dramatically,” said Russ Gaskin, chief business officer at Green America. “We believe that the market preference reported by the small businesses in this study is just the tipping point. Sustainability is clearly becoming a competitive imperative in business.”