Ethical treatment of employees in the workplace has moved to the top of our cultural conversation.
People are putting their foot down and demanding more of companies. As a result, the market is trying to adjust. We see a more pronounced pressure for financial entities— be they private companies, public companies, or financial firms— to respond to calls to a higher standard of ethics in the workplace or suffer the (financial) consequences.
This plays into a larger, emerging trend of investors wanting their investments to align with their social values. It’s a topic that we’ve covered in the past, and it’s one that’s integral to the foundation of Swell. Rather than trying to jump on board with calls for change at the last moment, Swell was built brick-by-brick to be an investment alternative for those who want to make an impact, while also taking an active approach to personal finance.
How Swell holdings make the cut
From the very start, Swell was founded to provide impact investing options. Sounds great, but what does it mean? Impact investing refers to those investments “made into companies with the intention to generate measurable, beneficial, social, or environmental impact alongside a financial return.”
In short: Impact investing is about looking for companies that are making changes in the world. Those who invest in impact do so because they are conscious about how their money moves the world – and they want to use their funds in order to facilitate social change. So, there’s a higher level of expectation for how holdings are vetted, which is why Swell is transparent about the way that holdings are chosen.
Breaking it down
The idea of measuring who is making a difference and lumping things together feels nebulous. So instead of saying, “These companies do good. Trust us,” Swell has broken down holdings into different categories that have become the six different portfolio offerings: green tech, renewable energy, clean water, zero waste, disease eradication, and healthy living. This allows investors to channel their finances towards solutions for one major challenge facing the world today. All of Swell’s portfolios are designed to build a better world, each with a different emphasis.
The focus here is on companies working to reduce our energy needs and the pull on energy infrastructure.
The renewable energy portfolio is all about companies that are working to harness renewable, natural resources to power our electrical needs.
Water is key to life. The companies in Swell’s clean water portfolio have been selected based on their work to conserve water, clean it, and streamline our systems.
In a society where disposability has become the norm, Swell’s zero waste holdings are committed to cleaning up the planet.
The disease eradication portfolio is focused on the improvement of quality of life through pharmaceutical and biotech solutions to major global health challenges.
Who doesn’t want to live a longer, healthier life? The healthy living portfolio is built out of companies working to help us do just that.
This is Swell's take on the most impactful companies across all sectors of the stock market.
So what does that mean about the companies in each of the portfolios?
This is where we’ll return to the term impact investing again to talk a little more about what it means, and the rubric Swell uses in order to select holdings.
Impact investing falls under the larger umbrella of Socially Responsible Investing, commonly referred to as SRI. At its broadest level, SRI “filters out companies involved in hurting our planet and our health.”
Environmental, Social, and Governance Investing (ESG) falls into this category. It screens companies for their environmental, social and governance policies to find the companies that are the best performers in each sector.
Impact investing goes one step further. In addition, to screening companies for their policies, with impact investing, you’re looking for companies that are actively working to fix major global challenges. There are certainly merits to SRI and ESG, but impact investing is the most comprehensive approach.
Be the change
Each of the Swell holdings is working to make the world a better place, and each is having a discernible impact on one of the six major global challenged where Swell is focused.
Our holdings are committed to the world, their communities, and their employees. They’re each trying to find innovative solutions to the world’s larger problems. In Swell’s healthy living portfolio, you’ll find companies like iRhythm, which is working to make the diagnosis or heart arrhythmias more effective, efficient, and pervasive. In the clean water portfolio, companies like Albemarle, which is committed to water purification and conservation.
Rather than limiting its screening of investments to “do no harm,” with impact investing, Swell aims to have a positive impact on global challenges by investing in companies that are out there doing good work.
Want to learn more? We invite you to get to know some of our holdings on the blog.