A Brief History of Positive Investing

history-of-positive-investingThe origins of socially impact or positive investing can be traced back to investing itself. There has been plenty of examples and variations of socially responsible investments from the 18th century, where religious groups laid out parameters in which companies followers should invest for the greater good.

1960’s America in response to the Vietnam War and civil rights movements, questioned which companies to invest in.  Through to the 1980’s where climate concerns arose with nuclear plant accidents and oil shipping disasters highlighted how shareholders could exert pressure on company policy.

From the 1970’s through to the 1990’s this pressure on fund managers to avoid investing in South African companies is cited as one factor in ending the apartheid regime.

More recently, the financial crisis in 2008/09 which nearly bankrupted entire economies, highlighted the need for investors as long term owners of banking institutions to call for robust governance.

Fast forward to the last decade and policy initiatives by 10 Downing Street, the White House, and the Vatican, have highlighted to companies and business leaders to look at new technologies and consider how they interact with the environment and community in which they operate.

All these have resulted in a rich history of a desire for social impact investing, combining two main outcomes of achieving social and environmental returns along with investment returns. By combining the two, it can prove to be more effective that treating them separately.

These links mean the future profits of companies will be affected by changes in the society in which they operate. Understanding how those changes will play out, and which companies will thrive is an important part of any long-term investment decision.

Social impact investing can mean different things to different people.

This doesn’t necessarily mean that an investor is placing ethics ahead of sound financial decisions; it is just good investment practice.

In a social impact investors eyes, how companies make money is just as important as to the amount of money they make.

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