Socially responsible investing encourages organizations to avoid buying stock in companies that fall short of certain ethical standards. But investors can use their clout to improve the behavior of companies in their portfolios that might not be included in the socially responsible category. This approach differs from strategies of disengagement, like divestment, but can make a big difference.
My own firm, Christian Brothers Investment Services, manages over $5 billion in assets, and our experience demonstrates how a philosophy of "active ownership" can have a significant, positive impact on the way companies do business.
Consider our work in the environmental sphere. As Pope Francis wrote in his recent encyclical, the Earth "cries out to us because of the harm we have inflicted on her."