Portfolio Screening

Socially Responsible Investing (SRI) seeks to return control over publicly traded companies to their owners so that they can take responsibility for what they own. Portfolio screening is a first step.


Socially Responsible Investing asks investors to consider more than the profitability of their investments. It asks investors to consider the social and environmental footprints of the companies or mutual funds they own. Integrating social and environmental issues and concerns into your investment decisions requires asking questions. Here are some of the questions that SRI poses. Do the companies you own (or the companies owned in the mutual funds you own):

• Treat their employees fairly?

• Pay a living wage?

• Offer employee benefits such as health insurance and retirement plans?

• Effectively integrate employee input into decision-making?

• Operate family-friendly workplaces?

• Respect human rights?

• Respect labor rights?

• Operate safe workplaces?

• Employ children?

• Use slave labor?

• Produce safe products?

• Manufacture weapons?

• Engage in military contracting?

• Own or operate nuclear power plants?

• Pollute the environment?

• Have an effective recycling program?

• Respect environmental standards and regulations?

• Support community organizations?

• Discriminate against women, people of color, older employees, disabled employees, or gay, lesbian, or transgendered employees?

• Tolerate sexual harassment?
  Have an independent Board of Directors?
  Have an independent Audit Committee on their Boards?

• Overpay their Chief Executive Officers, other top executives, and board members?

• List stock options as expenses on their books?

• Pay board members with stock options?

Some companies have strong and progressive answers to these questions. For others, some or all of these questions are embarrassing. Portfolio screening seeks to include companies whose answers are acceptable, and exclude companies whose answers are not acceptable. Among the many companies whose answers place them in the large gray area in between, portfolio screening seeks out those willing to engage in dialogue about such questions. Portfolio screening can reduce the risk you have to run to achieve the returns you need.

The SRI industry represents a growing movement among investors who want to own shares in companies (or mutual funds that own shares) that are actively concerned about the answers to these questions. By screening your portfolio, you add your voice to this growing movement. You can do the research necessary to screen your portfolio yourself. Business Ethics magazine publishes an annual list of 100 “best corporate citizens” which might be a good place to start. Or you can use a SRI Professional, such as L. B. Stant and Associates, LLC.

Community Investing | Shareholder Advocacy