A Practical Guide to Socially Responsible Investing (Review)

With the ever present global citizenship campaign and a new green revolution has emerged the desire for our money to work towards what agree to be in alliance with those values – socially responsible investing.

In Compelling Returns: A Practical Guide to Socially Responsible Investing,  Scott J. Budde, CFA writes to an audience eager to see their money contribute to a greater good or at least prevent firms with poor environmental social governance (ESG) or those that lack corporate social responsibility (CSR) from profiting off of their investments. Budde has designed a “practical guide” that is targeted towards a wide range of financial savvy investors.Furthermore, he concludes, based on his strategies outlined in the text that socially responsible investing offers just as competitive returns on investment as traditional investments.

Socially Responsible Investing

Putting aside the numerous awkward mentioning of the firm he represents TIAA-CREF, Budde is successful at communicating the common strategies of SRI with regard to their strengths and weaknesses. However, his writing is dry, rather boring, and highly repetitive for a topic that is capturing and invigorating millions of youth around the world.

Furthermore his ideas and strategies that he holds in high regard offer little proof of their tested success. Therefore his arguments hold merit to a certain extent and may prove to be useful under the right conditions, but few are convincing enough and are hardly compelling.

The author’s layout seeks to introduce SRI and its varieties as well as its relevance through the first three chapters. There he addresses the common approaches to SRI and highlights the second perspective of his model, his thesis; SRI generates competitive returns in comparison to traditional investing. Then he tackles the three most important methods in SRI: social screening, community investing, and shareholder activism in chapters four, five, and six respectively.

Chapter seven tries to educate on the superior opportunity available to institutions with regard to SRI compared to individuals. Chapters eight and nine attempt to defend his SRI strategies and counter those who might oppose those strategies. Perhaps the most valuable nugget of information lies in the appendix’s which provide resources for all of the material the reader so desperately seeks reference to in the text.

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