Quiet Conversations: The Expressive Nature of Socially Responsible Investors

Statman, Meir
February 2008
Journal of Financial Planning;Feb2008, Vol. 21 Issue 2, p40
Academic Journal
• Few investment issues are more contentious and fraught with misunderstanding than socially responsible investing. Some planners shun investors who want to invest in socially responsible ways, or they advise investors to donate their profits from non-SRI investments to social causes. • Part of the objection to socially responsible investing is the mixing of the utilitarian nature of investing (returns, risk, liquidity, taxes) with the expressive nature of investing (patriotism, fun, social responsibility, prestige). • Studies have shown that from a utilitarian standpoint, socially responsible investing performs just as well, on average, as conventional investing. • This paper focuses on the author's "quiet conversations" with eight socially responsible investors, including a Catholic nun, an environmental planner, a video producer and the owner of military-related companies. Each investor responds to such questions as what matters most to them as socially responsible investors, do they go beyond socially responsible investments such as volunteer work, are they willing to give up returns for social responsibility, and how they assess companies with mixed SRI records. • Financial advisors already accept many investment preferences of clients and construct portfolios reflecting these preferences, such as low-risk or "home bias" portfolios. Advisors should accept clients' preference for socially responsible investments as well.


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