What if, right now, you could invest your dollars in only companies that aligned with your values? We believe you should be able to do that, which is why we built Swell. You have more control than you think. It’s time to start pairing your morals with your investments.
But for this to happen, we need a paradigm shift. The financial industry needs to provide radical transparency into the investment options they offer. It’s the only way investors can decide what’s best for their future, society at large, and the planet.
In a survey Swell Investing conducted with more than 2,200 US adults, we found that nearly half (49%) of millennials who have investments aren't able to name the top three companies in their portfolios. The largest and most popular types of investments in the US right now are mutual funds and ETFs–essentially baskets of securities that typically tout strategy, not individual holdings. So it’s not surprising that people who would never support big oil, tobacco, or weapons manufacturing find themselves invested in these industries. This is the moment to turn our good intentions into action. If you do not want to live in a polluted world, then take a page from the United Nation’s playbook and do not invest in companies that pollute. Even if just one of the holdings in your ETF or mutual fund doesn’t align with your values, you’ve got a moral dilemma.
You have agency over your investments. Every single one. People are saying ‘What can I do?’ The truth is: a lot.
Divest your funds from what you do not wish to support and move that money into impactful investments.
Despite the best of intentions and a world of information, consumers are at a disadvantage. How can you make sure your money is aligned with your values if you don’t know which companies you’re invested in? Opaque investments don’t demand checks and balances, which is exactly what we need right now. The details of what’s in your investment might be available to you with a little digging, but the onus is on the investor, rather than the provider. It’s time for that to change.
This isn’t the first time an industry has provided more clarity at the request of its consumers. Packaged foods had long provided a list of their ingredients and additives, but it wasn’t until the introduction of nutritional labeling in 1990 that packaged foods could be considered accountable. Simply presenting the information without context wasn’t enough for a consumer.
For us, transparency and accountability are necessary for building an investment option that drives performance along with purpose. We invite our investors to look beyond the label and connect with their capital by learning about each of the companies they are invested in. By aligning the stocks in our portfolios with the United Nations Sustainable Development Goals, we add to that accountability. By sharing the UN SDG connection for every single company in our portfolio, we provide the opportunity for you to ask the question: Do I want to invest in this company?
Thanks to labeling standards, US food consumers are empowered to make choices based on easy access to information. Many use those factors to guide them toward healthy choices; some choose to ignore the facts and go with their gut–but the option is there for us all. The time has come for radical transparency in finance.
My question to you: If you really knew where your money was going and the impact it was having, would you make more intentional investing decisions?
This is an updated post of an article that originally appeared on LinkedIn in March, 2018