Julie Castro Abrams, experienced CEO and founder of How Women Lead, venture capitalist and sought-after speaker on female entrepreneurship
During more politically polarized, socially charged periods in history, people have doubled down and invested in areas that aligned with their values. So, it makes sense that in today’s tumultuous landscape, investing decisions are motivated by more than maximizing returns; they’re also a powerful avenue for effecting social change.
In the U.S., I am seeing reports of how policies focused on governance and the environment are increasingly impacting women’s rights. As a result, I believe women are beginning to explore investment strategies that are more closely aligned with their self-interest and values. And right now, women have more capital to invest than ever before.
Women in the U.S. are set to inherit most of the trillions of dollars in “The Great Wealth Transfer” in the next five to 10 years. This creates a massive opportunity to shift investing volume toward women-forward investments. And the concept of integrating personal values into investment decisions has gained significant traction. A study revealed that 74% of female investors are planning to increase their share of ESG investments in their current portfolio. This trend underscores a growing desire among women to not only seek financial returns but also to drive positive societal impact through their investment choices.
Practical Strategies For Aligning Investments With Your Values
By strategically directing capital, women can use their growing wealth to support and promote new, emerging and expanding businesses that align with issues such as sustainability, gender equality and social justice. For investors looking to align their investments with their values, these actionable steps can serve as a guide:
Define your core values.
Start by thinking about the social, environmental or political issues that matter most to you. Whether it’s climate change, diversity and inclusion or human rights, get clear on the issues you’re most passionate about, and stay aware of how they are evolving.
Evaluate your current portfolio.
Assess whether your existing investments align with your identified values by analyzing the policies and practices of companies within your portfolio.
Select value-aligned investment vehicles.
You can invest in ESG-focused funds, gender lens investment funds or companies known for strong corporate social responsibility practices.
Diversify investment strategies.
By adding alternative investments to your portfolio, you may see greater returns over time, and it can give you a more direct impact with your investments.
Leverage specialized platforms and advisory services.
These types of platforms or services that specialize in socially responsible investing can also help you construct a values-aligned portfolio.
Engage in shareholder advocacy.
By participating in proxy voting and advocating for corporate policies that reflect your values, you can connect with other shareholders and work collectively to hold boards and executives accountable.
Women hold substantial wealth, which affords them the power to influence and drive societal change through their financial decisions. By aligning investments with personal values, they can not only gain financial returns but also contribute to a more equitable world. Now is the time for everyone to recognize the profound impact of “voting with your wallet” and embrace investment strategies that reflect and promote the values they hold dear.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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