Investing for a healthy and happy retirement, is a long term project. We will probably only see the results of our decisions many years from now.
Do you think that the decisions you take today should solely focus on the risk and returns of an investment, or do you think that your money should be used ‘responsibly’?
Tell us what you think.
- solely consider the risk and returns to the investor
- consider (and balance) the impact for the investor, society & the environment
Recently, in the US, the Department of Labour announced that:
“Private employer-sponsored retirement plans are not vehicles for furthering social goals or policy objectives that are not in the financial interest of the plan,” said Secretary of Labor Eugene Scalia. “Rather, ERISA plans should be managed with unwavering focus on a single, very important social goal: providing for the retirement security of American workers.” - full article
While this specifically affects the US, it points to an important question for our future.
Are our best interests served when we ignore ‘outside factors’ and we focus exclusively on the financial impact of our investments, so we mainly consider the risks and returns of the funds we invest in? After all, this is what the funds were created to do.
Or do we think that our money should be invested in businesses that have been independently assessed for their ‘ESG’ (environmental, social and corporate governance) or SRI (socially responsible investing) credentials? Or even more, in businesses and industries that will have a positive ‘Impact’ on society or the environment?
What if making this choice meant your investments performed slightly worse for you? Is this a price you would be willing to pay?
How important are these choices to you? Or is this a false choice?