What if you could invest in companies that are fundamentally good for society and the environment, rather than just financially profitable? While this may sound like an accounting trick or a new age fad, the field of “humanitarian investing” is growing rapidly because it makes so much sense.
Humanitarian investing is when individuals or organizations invest capital with the intent of producing a positive social or environmental impact as well as a financial return. This differs from traditional investing practices by focusing on how investments can help people, not just how they can make money.
These types of companies and investment opportunities have been around for many years, but they are growing in popularity right now because more people are becoming aware of the negative impact that some for-profit companies can have on society.
This guide will walk you through all you need to know about humanitarian investing so you can make a difference with your money.
What is Humanitarian Investing and Why Should We Care about Humanitarian Investing?
As highlighted earlier, humanitarian investing is any type of investment that has a positive social or environmental impact in their business practices by benefiting people and/or the environment.
Humanitarian investing has the potential to make our world a better place in many ways. For starters, when you invest with a humanitarian financial advisor, you may be able to support companies that create jobs, reduce environmental pollution, and provide products and services that people need in their everyday lives.
Not only will your money help make these companies financially successful, but they will also have an impact on the world by creating positive change in the areas that they operate.
As an investor, you have the opportunity to choose which companies you want to support with your money. This can help you feel more confident about your investment choices and make a bigger impact with your money.
Furthermore, humanitarian investing can be a great way to diversify your portfolio. This will help you balance your investments so that you won’t have all your eggs all in one basket.
Types of Companies in Humanitarian Investing
There are many industries that may qualify as humanitarian investing, but it is important to choose the right industry for your particular goals and risk profile. Examples of industries that have a history of benefiting society through their business practices include:
- Healthcare – A wide variety of healthcare companies produce products and services that improve people’s health and quality of life. Healthcare businesses can be a great fit for humanitarian investors who want to make a positive impact with their money.
- Energy – Investing in companies that produce clean energy can greatly reduce the human impact on global warming and benefit people in many other ways, such as lowering energy costs.
- Socially responsible investing – Sometimes you may want to invest in companies that are actively seeking to solve social problems, such as a lack of affordable housing, or a lack of opportunities for people in low-income areas.
- Water and sanitation – Companies that make safe water and sanitation more accessible can help prevent disease and death.
The Bottom Line: Finding the Right Humanitarian Investment for You
All in all, humanitarian investing is a great way to put your money to work for good and make the world a better place.
But before you decide which companies to invest in, you will want to figure out what your investment goals and investment values are and whether the potential investment is inline with those goals and values. This will help you decide which type of humanitarian investing strategy is best for you.