American Financial Investments

American Financial Investments

American Financial Investments

Social investing may have once been considered a trend, but as an increasing number of businesses move towards becoming both environmental and socially conscious, social investing is now becoming a popular philosophy amongst future investors. For those who are unfamiliar with the term ‘social investing’ is used to define the process by which investments are made within a company based on ethical and moral principles. In order to break down the term ‘socially responsible’ we must advocate that the term 'social' implies the responsibility to society and responsibility relates to ethical obligations. Social investors “want their money to move society toward a positive objective" for example "cleaner environment or a fair employment system,” (Kinder, Lydenberg & Domini, 1993, p.1).

Social investing is known to have originated during the seventeenth century amongst the Quakers, who stood for social causes and refused to profit from the war or slave-running industries. The Age of Reform of 1890-1917 is when contemporary social investing became more popular, which was supported by political agendas within the following categories of personal reform, social welfare and institutional change (Kinder, Lydenberg & Domini, 1993). Still to this present day investment opportunities within industries that produce tobacco, weapons and other potentially harmful substances are not appealing to social investors despite their abilities to generate significantly large profits.

Skeptics like Jarrett Woods feel that social investing can be a foolish and naïve attempt for investors looking to generate a profit. Mr. Woods is a graduate of the Florida A&M, Business Administration Master’s program. In his interview he logically stated, “The sole purpose of investing is to get a return on your investment.” When asked if he thought it would be more profitable for investors to rule out purchasing stocks in environmentally conscious firms he then added, “It is important for investors to be more realistic with their options, for instance smoking is clinically known to be unhealthy for people however, this vital fact does not stop them from smoking and the tobacco industry will continue to dominate and generate large profits off of people’s addictions.” Mr. Woods was then asked if he would consider taking a more socially responsible approach in his personal financial endeavors to which he thoughtfully responded, “As long as I felt that the company’s go-green philosophies did not hinder them from being financially successful, then yes it would be more likely for me to invest in the proactive firm.”