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Socially responsible investing is gaining in popularity, but there’s a pronounced gap between those who value it and those who actually invest this way. According to a new NerdWallet survey, while more than two-thirds of investors (69%) say it’s important to them to invest in a socially responsible way, fewer than 1 in 4 investors (23%) say most or all of the money they currently have in investments is invested in accordance with their values.
The NerdWallet survey of more than 2,000 U.S. adults — including 1,608 who currently have investments — conducted online by The Harris Poll asked investors about their thoughts on socially responsible investing, including whether they invest this way and how much of their portfolio aligns with their value systems. We also asked about what’s holding some investors back from participating in socially responsible investing.
“There are many reasons why an investor interested in socially responsible investing would let their values slide when it comes to their portfolio,” says Alana Benson, a NerdWallet authority on investing. “It can require time-consuming research, and it’s hard to measure your individual impact and choose investments. But investors should know that there are more options than ever, including robo-advisors that offer socially responsible portfolios.”
A majority of investors value socially responsible investing
Environmental, social and governance (ESG) investing is a form of sustainable investing that measures investments based on those three categories. Environmental factors include carbon emissions and green energy initiatives; social factors may look at labor practices and employee diversity; and governance includes corporate executive pay and political contributions, among other things.
Most investors (69%) say it’s important to them to invest in a socially responsible way. Of that group, close to half (45%) say it’s most important to them to choose investments that focus on environmental impacts, while 29% prioritize social impacts and 14% governance impacts.
What you can do: Decide what socially responsible investing means to you
Not everyone defines socially responsible investing the same way, so if you’re interested in investing according to your values, you first need to determine what that means to you. Consider what you want to actively invest in — like …….
