Recently, the inverse of this strategy has become more popular; supporting businesses and organizations that are run by or work for the communities you belong to is a great way to keep those businesses thriving, which has the roundabout effect of encouraging other members of that community to start their own businesses and thrive.
These tactics also exist in investing. Divesting caused Peabody, the world’s biggest coal company, to go bankrupt in 2016. On the other side, there’s ethical investing (or social impact investing, ESG investing, whatever you want to call it).
But how do you decide if a company is worth divesting or investing in? Well, there are a lot of approaches.
The easiest is to invest in existing ethical funds. ‘ESG’ funds like the Vanguard FTSE Social Index Fund which “track a benchmark of large- and mid-capitalization stocks that have been screened for certain social, human rights, and environmental criteria” allows you to easily manage your money in a way that outsources the work of assessing companies.
But what if that isn’t enough for you? Well, then it’s time to start doing some research! Make a list of the things that matter to you when supporting a company or business. Examples might include:
Beyond the stock market, there are also ways to get a return on investment in more innovative ways. Organizations like The Zebra Collective and other collective venture capital or angel groups like Gaingels offer ways to be more specific with your investments, and to invest in founders and ideas that excite you.
Ultimately, it’s about what matters to you and where you want to put your money. Everyone has different principles around what is important to support, and as long as you feel you’re doing good in the world with your money, that’s all that matters!