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Social Investment: An Investment that Doesn’t Involve Money

Every time we come across the word ‘investment’, we automatically think of banks, monetary units and financial systems. But there is one type of investment used by several businesses that does not necessarily require cash.

Socially Responsible Investment (SRI) has been making the rounds in the business sector. One might ask what kind of investment this is. As the name suggests, SRI, also known as Social Investment, is a type of business modeling that aligns investment strategies to the social values of its people. It takes into account financial return and at the same time socially responsible practices for the benefit of society at large. How do they do it? There are several aspects we can look at when one wishes for his company to deliver services and at the same time be socially aware.

Environment

Ever noticed most companies, especially in the food industry, have switched to more ecological-friendly material? This is a sample of a business process that responds to environmental issues. Companies have incorporated resolutions to environmental issues in their business models as a form of investment. Resolutions can be in the form of using less plastic materials, recyclable products, and producing biodegradable products. On the other hand, they can opt to support environmental groups through funding their sustainability projects. Companies set aside a share of their profit and donate it to these organizations.

Social Justice

The population in different work environments continue to become diverse as the days go. As a response, several companies design policies to ensure inclusion of older workers, individuals with different religious beliefs and gender preferences, and persons with disabilities. There are companies which employ high-functioning individuals with autism. There are also those who abolish the imposition of gender-stereotyping uniforms and activities. Diversity may have been a hurdle for companies in the past but by investing in business models that cater such population, diversity has become an advantage to the trade of these companies in the present day.

Company policies have also evolved over time in the favor of its employees. If you’re a woman working in a company with a population of 80% male, it is obviously a relief for you to know that the company will not tolerate gendered harassment in the office. Also, it makes a better environment for you once you are assured that work place violence is highly condemned and strictly illegal. Investments in enforcing such policies of course demand resources, such as manpower. But this investment surely makes a difference for the growing diversity in the population of developing business.

Consumer protection has also been pushed forward by companies. Rise in damages litigation speaks of the central consideration in terms of limiting a company’s risk and protecting the company image and credential as well in the eyes of the public.

Corporate Governance

The Paris Climate Agreement is a treaty that aims to lower a country’s carbon emissions contribution

Companies should also take into account a more internal aspect regarding social investment. We have come to the point that we no longer assess a company by the salary it gives us. Employees prefer companies who can provide great benefits aside from monetary compensation. A common social investment done by companies is enhancing recreation and relaxation reward systems. This tactic is done to improve employee motivation and maintain holistic development in the working environment. They come in the forms of discounted membership in different recreational activities, planned outing and programs sponsored by the company, and even social engagement parties. This form of social investment involves funding of course. But its investment is deeply rooted. A happy employee translates to higher productivity. And this in turn becomes favorable for the company.

In terms of management, companies have shifted to devices that help ensure appropriate distribution of power. This is usually the case of CEO’s with their board of trustees and other stockholders. Equity is prioritized by making sure monopoly is of least effect in the company. This translates into better management practices that trickle down to employees and later on, improve the booming business.

Gone are the days when companies are only invested in skyrocketing their sales. Employers have taken a different path to booming their business through investing in areas other than profit. Social responsibility provides an impact to the business models because they show that companies are not only after profits but are also after the well-being of their consumers and employees as well. This is the kind of investment where each party is considered to profit equitably.

 

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