What are the Socially Responsible Investing (SRI) trends into 2022?
Your savings and investments can help create a better world! Our new guide gives you hands-on advice and information to help you put your dollars to work to build healthy communities, promote economic equity, and foster a clean environment. In this dynamic report we are going to monitor and update the major Socially Responsible Investing (SRI) trend into 2022.
Socially Responsible Investing (SRI) defined
Integrating personal values and societal concerns with investment decisions is called Socially Responsible Investing (SRI). SRI considers both the investor’s financial needs and an investment’s impact on society.
You can find a more detailed explanation of what Socially Responsible Investing is, and also more about Environmental, Social and Governance (ESG) in our explainer article here.
SRI trends into 2022
We see five Socially Responsible Investing trends as we enter 2022.
- Climate change
- Food diversification
- Fashion industry revolution
- Mental health
- Equal pay
With a growing global commitment to preventing climate change, the Socially Responsible investor will likely look to invest in companies that are looking to prevent climate change, or even to help to counter climate change. And on the flipside, to avoid investing companies that have a large carbon footprint.
What we eat is increasingly under focus from a personal level, but also on a societal level too. This, therefore, sees an impact for any Socially Responsible investor. The millennial and Gen-Z consumers are not the only segments of society that are changing their dietary and eating habits. The demand for vegan and plant-based protein options has seen strong growth for companies providing sustainable options in these areas, which is clearly attractive from both a financial and Socially Responsible perspective. Beyond Meat and Impossible foods are examples of such companies. This is certainly an area to monitor for 2022.
Fashion industry revolution
Although the fashion industry has always by definition been a trend setter, it has been rather behind when looked at from the SRI viewpoint. Not anymore though. Sustainable fashion is a significantly growing trend, with used clothing companies seeing huge growth. Depending on measurements, the second-hand clothing market is growing by a factor of double-digit multiples compared to new clothing.
The Socially Responsible investor has the opportunity to see high growth alongside meeting their Socially Responsible objectives.
The global pandemic has brought mental issues even more to the fore, an area which was already becoming more mainstream and less taboo. The negative impacts for companies from not protecting and helping their employees with mental health issues are significantly high.
This will likely see more flexible working arrangements going forward and outcome-based work models. Businesses that are able to provide a secure and positive environment from a mental health standpoint will likely benefit from better productivity in the future, increasing revenue for their investors.
Although the greater focus on workplace operations has been a growing trend for some time, the global pandemic has brought this even more into focus. Inequality across race, gender and sexual orientation has been brought even more into the spotlight. In addition, executive remuneration gaps and inconsistent pay ratios are even more under scrutiny.
For example, globally, women still earn significantly less than men doing the same jobs. In the US, some data points to this gender wage gap being 70-80% between men and women doing the same job (although the true data is difficult to determine).
Corporates that seek to narrow the social gap between their employees and provide the necessary benefits to their local supply chains will become even more attractive to Socially Responsible investors in 2022. Whereas companies that do not react to this trend are likely to see negative impacts, for example social boycotts, worker strikes and maybe legal challenges. None of which are positive for the stock price.
How to move forward with your Socially Responsible Investing decisions into 2022?
Do your research thoroughly to pick the right SRI choice for you, that suits your goals and objectives. Or find a SRI fund that confirms to the ESG framework and let a professional manage your investment.
Etoro offers what they call Ethical investments that covers this area.
74% of retail CFD accounts lose money.
You should consider whether you can afford to take the high risk of losing your money.
And don’t forget to come back to this page and use this dynamic resource guide to discover up-to-date return and performance information on a range of socially and environmentally-responsible investment options. Or, for more information about how your personal financial decisions can build strong communities and a healthy environment, visit Green America’s site.