Ethical Consumerism and Investment~SRI~

1. ETHICAL CONSUMERISM AND INVESTMENT
~SRI~
• By: Tunisia I.e. Al-salahuddin
• Business ethics and sustainability: org530-1
• Colorado state university- Global campus
• Instructor: JAMIE SMITH

2. INTRODUCTION
Within todays financial and economic market ‘Sustainable Responsible Investment’ means longevity
within business. Companies are looking for business to invest in that will produce capital and have a
product or service that will weather the storm and be around for decades. Investment means money and the
ability to produce money. Sustainvest Asset Management stated, “We actively try to include enterprises
that have strong sustainability rankings with issues such as good employer-employee relations, strong
environmental practices, products that are safe and useful, and operations that respect human rights around
the world” (2015, Sustainvest). Each year the United States keeps record and presents a report on
sustainable investment businesses.

3. VALUE CREATION
Within SRI the value of creation is for companies to invest in companies that can create sustainable
products and services. There is always a value point within investment that even wall street recognizes
and understands. Investors look for:
• Investment in companies and governments that the investor believes best hold to values of importance
to the investor (Forbes, 2013).
• Shareholder advocacy is exactly what it would seem; socially responsible investors proactively
influencing corporate decisions that could otherwise have a large detrimental impact on society
(Forbes, 2013)
• Community investing has become the fastest growing segment within SRI, with some $61.4 billion in
managed assets (Forbes, 2013).
SRI and Capital Investors are looking for companies that look right, produce capital, and present a portfolio
of profitable gain i.e. bank stamen, investors shareholders report, years in business.

4. THE SIGNIFICANCE OF SRI
(WHAT’S YOUR STICK)
The significance of the SRI is mere sustainability within the USSIF report that also gets its data from the
Consumer Price Index (CPI) and other government reports to create their informative reports. Chamberlin a
writer of Forbes stated, “The SRI approach is to invest in stocks and bonds from those companies and
counties or municipalities that promote certain actions or eschew those, which participate in offending
actions. It is not unlike the carrot and the stick premise; you reward those that you agree with by investing in
their companies (the carrot) and avoid buying shares of those companies that offend your core values (the
stick)” (2014, Forbes). SRI creates a standard that companies must live up to along with proper investors,
but rather than have a competition they create standards that must be meet that attract investors.

5. 3 WAYS TO INVEST IN SRI
(COMPANIES, BONDS, STOCKS, MUTUAL FUNDS)
Sustainable Responsible Investing involves taking a deeper look into organizations overall agenda and view their
Plans of Action.
• Program-Related Investing: What is the program involved in and does the program seem to fit the interest of
the investors, and what they want to give capital to. The (stick) or the program of the company must grasp the
interest of the investor. Companies, stocks, and bonds must have sustainability.
• Mission-Related Investing: Many companies like: Carnegie , Onassis Fund, Rockefeller Fund, and Capital
World Bond Fund. Many of these funders look for investors, and also invest in smaller businesses, and
organizations. When it comes to SRI funders and investors look for an excellent investment.
• Impact investing: Impact funding within SRI are companies or funds that make a community and global
impact. These sort of impact investing must live up to the rules of SRI and be of a larger entity.

6. ENVIROMENT AND SOCIAL GOVERANCE (ESG)
INTEGRITY
Companies must up hold their integrity with funding and investing. They must also look for companies that
they want to invest in to do the same. The environment and social governance is usually within the land laws and
the policies and procedures that are instilled within the company. Organizations that are sociably responsible
along with environmentally responsible are more appealing to investors. The carbon foot print that companies
leave should be minimal this is necessary for the environment and investors must take this into consideration.

7. KEY ESG ISSUES TO CONSIDER
• Environmental Carbon emissions, greenhouse gas emissions, disclosure/measurement and reporting
Climate change; effect on Company/risk exposure/opportunities Ecosystem change Facilities citing
environmental risks Hazardous waste disposal/cleanup License to operate in communities Pollution
Renewable energy Resource depletion Toxic chemical use and disposal
• Social Animal welfare Child labor Community relations Discrimination Diversity (employee/Board
diversity) Facilities, citing social risks Genetically modified organisms Living wage disputes Predatory
lending Political contributions Political risk of involvement in troubled markets, countries Sexual
harassment Shareowner advisory vote on executive compensation Slave labor
• Governance Cumulative voting Dual-class share structure Executive compensation (pay for
performance, pay equity) Majority voting Poison pills Say on pay Separation of chairman/CEO
position Shareowner rights Staggered Boards Takeover defenses/market for control
• (2008, CFA).

8. INVESTING IN SOCIALLY RESPONSIBLE
COMPANIES
When companies invest in SRI companies they must meet certain standards of quality
and sustainability for the future.
• Product Quality- Products must meet a standard
• Service Quality- Services must be of excellent standards
• Sustainability- Companies and funders must be able to sustain their standards of production along with
investors.
• Community Impact: All companies must make a vital impact within their community by giving back was
they reach a peak of success. The majority of funders do community investment and funding as a way of
giving back.
• Environmental Impact: Be cautions of your environment by going green and keeping pollutants down.
These companies are very desirable to funders.
• Financial Impact: What is the financials looking like of the company and the funders and do they keep
excellent records and books.

9. ESG CRITERIA TO BE USED
• Awareness: Investors are more likely to use the awareness criteria when looking for companies to invest
in. Investors that want to invest in companies must make sure that they check the mission of the
company along with all agendas and plans of the companies to ensure they meet SRI rules and
regulations of that states company.
• Environment: Investors are looking for environment friendly investors that use the go green concept and
mean what they say.
• Social: Using a “BEE” Social within community and development is something else investors look for.
Giving back to your community.
• “Community Investing directs capital from investors and lenders to communities that are underserved by
traditional financial services institutions. Community investing provides access to credit, equity, capital,
and basic banking products that these communities would otherwise lack” (2015, SAM).

10. THE LINKS BETWEEN ETHICAL CONSUMPTION
AND ETHICAL INVESTING
ETHICAL CONSUMPTION
• Ethical consumption is something that
consumers regulate. Consumers usually
create the standards for what they want at
the top and now the bottom of the pyramid.
The products, by products, and services
rendered by the manufactures and even the
investors are the standards usually set by
those who buy into the product and services.
ETHICAL INVESTING
• Ethical Investing: Meaning do not invest in
companies that are pyramid schemes that
have no moral standing. These companies
are usually fake put together companies on
paper that usually do not exist at all (no
product and no service). Unethical
investing can also be investing in companies
that do unethical things or have unethical
practices under law and governance.

11. SRI-FINANCIAL PERSPECTIVE
• The financial perspective ends with the consumer the
customer and then goes back to the perspective. In
order to gain capital, get financial lenders to invest in
them. The perspective also includes companies to be
social responsible investors. The perspective should
stay encompassed within all phases of the formation of
the company agenda and the investors governance.

12. CONCLUSION
The ESG and SRI of all companies in order for investors to fund them or ever consider
funding them should be within the over all mission and plan of the organization. Investors create
the policies and procedures that their organization should follow along with companies they put
capital into. Environment, Social, and Community are always major factors that need to be taken
into consideration when funding any company.

13. QUESTIONS

14. REFERENCES
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE FACTORS AT LISTED COMPANIES. (N.D.). RETRIEVED
MARCH 5, 2015, FROM HTTP://WWW.CFAPUBS.ORG/DOI/PDF/10.2469/CCB.V2008.N2.1
THE IMPACT OF SUSTAINABLE AND RESPONSIBLE INVESTING. RETRIEVED MARCH 5, 2015, FROM
HTTP://WWW.USSIF.ORG/FILES/PUBLICATIONS/USSIF_IMPACTOFSRI_AUG2013_FINAL.PDF
THE ROCKEFELLER FOUNDATION. RETRIEVED MARCH 5, 2015, FROM
HTTP://WWW.ROCKEFELLERFOUNDATION.ORG/
SOCIALLY RESPONSIBLE INVESTING: WHAT YOU NEED TO KNOW. (N.D.). RETRIEVED MARCH 5, 2015,
FROM HTTP://WWW.FORBES.COM/SITES/FEEONLYPLANNER/2013/04/24/SOCIALLY-RESPONSIBLE-
INVESTING-WHAT-YOU-NEED-TO-KNOW/
(2014, JANUARY 1). RETRIEVED MARCH 5, 2015, FROM
HTTP://WWW.USSIF.ORG/FILES/PUBLICATIONS/SIF_TRENDS_14.F.ES.PDF