For an increasing number of investors, money is more than dollars and cents – it’s a matter of personal values. Driven by a desire to pursue financial goals in a way that aligns with their world views, this belief lies at the core of the Responsible Investing (RI) strategy.

RI is a growing movement that allows individuals, families and institutions to express their intentions and values through their investment decisions with the goal of bringing about social change. The aim is to generate competitive financial returns along with positive social impact. You might, for example, practice responsible investing by dedicating your dollars to a company that offers products and services tailored to the needs of women and girls as consumers.

Investing for social impact is in the spotlight now more than ever, as society, and the financial markets, continue to navigate uncertainties introduced by 2020.

“Social unrest, COVID-19 and a contentious election year contributed to notable shifts in consumer behavior, notably among women,” said Amanda Agati, PNC’s Chief Investment Strategist. “Women, specifically, are taking a closer look at their investment strategies as an insurance policy for protecting their financial resources. Considering RI practices is a key part of this conversation.”

No matter where you fall on the scale – from just beginning the conversation to well-seasoned investor – options are available for advocates at all places on the spectrum.

Options Abound

Responsible investing can expand the toolkit for making positive social impact by building on philanthropic initiatives to also include where and how you invest your money. You can invest according to your principles at just about any financial level, from directing your IRA contributions to mutual funds that specialize in RI to supporting women-owned startups as an angel investor.

“The key, no matter your asset level, is to begin with a clear understanding of the areas that interest you most,” said Nick Ashburn, director of responsible investing. “The array of investment options has evolved by leaps and bounds over the last decade, so it’s important to identify and articulate RI goals early on in your journey.”

For investors looking to consider gender as part of their investment criteria – an approach known as gender lens investing – one could look for investment strategies based on an assessment of a company’s policies and practices that could indicate they are a high-quality employer for women, including areas like pay equity, parental leave policies, and gender parity throughout the company.

An Implementation Strategy with Staying Power

In PNC’s view, Responsible Investing is a personal philosophy that comes to life as an implementation strategy when considering your investments’ role in achieving your financial goals. And, it’s a strategy with staying power – especially when viewed through the lens of recent market and sociopolitical uncertainty.

Mutual funds with strong environmental, social and governance characteristics have performed quite well against a variety of benchmarks during the pandemic, providing validation that sustainable and responsible investments can, at times, differentiate themselves from the pack, even in volatile markets.

The conversation amongst investors is shifting,” said Ashburn. “The dialogue is moving away from how RI might affect financial performance and more toward how investors can optimize a portfolio for both long-term economic and values-based goals.”