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Your Values and Your Investments  Thumbnail

Your Values and Your Investments

Socially responsible investing (more commonly understood as ESG) was once a fringe concept. In recent years, this trend has gone from the fringe to the forefront. So what is socially responsible investing? 

Socially responsible investing (SRI) is a general term used to describe various subsets of investing that attempt to align your portfolio with your values. Of course, we all have different beliefs and values, so there is a wide array of SRI categories. However, there are two categories that tend to be the most popular:

  1. ESG (Environmental, Social, and Governance)
  2. BRI (Biblically Responsible Investing)


ESG investing attempts to emphasize investments in companies that have a high standard for sustainability of environmental resources.  They also have responsible policies around societal impact and corporate governance that supports these policies. Types of companies that may be excluded from an ESG portfolio are oil and gas companies, firearm manufacturers, and companies with a board that lacks diversity.

BRI investing focuses a portfolio on investing in companies that align with Biblical principles. This may mean that companies that support or participate in abortions, gambling, pornography, and tobacco would be excluded from the BRI fund.  Although both ESG and BRI fall under the umbrella of socially responsible investing, you can see the types of companies that are excluded are quite different.

The Problem

Although I can understand wanting your portfolio and values to align, I believe that the size and complexity of publicly traded companies make this very difficult. For example, Amazon is a company that has come under fire for unfair treatment of employees, has a huge carbon footprint, and is included in some ESG funds. On the other hand, they have initiatives to reduce net carbon emissions to zero by 2040, AmazonSmile has generated nearly two hundred billion dollars for charities, and Amazon scored 100 on The Human Rights Campaign Foundation's Corporate Equality Index. 

For someone looking to invest based on their values, Amazon is a moral paradox. Not to mention, Amazon has been one of the best-performing companies in recent years. Would you really want to exclude some of the best-performing stocks from your portfolio?

BRI has its own set of moral paradox issues. Perhaps you wish to align your portfolio with Biblical principles, but you don’t necessarily have an issue with alcohol. Many BRI funds explicitly exclude companies that produce alcohol. This is just one example of where your values may not align completely with the values of the funds. 

The Solution

Although the advisors at Financial Strategies Group have the ability to provide ESG and BRI investing solutions, I believe that there are other ways to make an impact with your investments. First, please accept this premise: We are all teachers. We teach our children, our friends, and members of our community. If you accept this premise, ask yourself this question:

“If your final will and testament is your last teaching, what do you want it to teach?”

Of course, this question implies charitable giving. I believe the dollars we earn, save, and invest can have a great impact by going directly to fundraisers or charities in our community. Compared to excluding certain companies from our portfolio, direct gifts have an explicit impact. 

I would not discourage anyone from trying to align their portfolio with their values. However, there are many other ways to make an impact on our community and society.

Written by: Brice Carter

This commentary on this website reflects the personal opinions, viewpoints and analyses of the Financial Strategies Group, Inc employees providing such comments, and should not be regarded as a description of advisory services provided by Financial Strategies Group, Inc or performance returns of any Financial Strategies Group, Inc Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Financial Strategies Group, Inc manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

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