Given that ethics are specific to the individual, socially-responsible investors are challenged with selecting investment opportunities that not only support their own values but also reflect the principle of the Golden Rule or do no harm. No company is perfect, and it is unrealistic to presume that there are companies capable of producing zero harm and total benefit for humanity. Sustainability investors are aware of this and strive to choose only those investments that produce the best and least harm for the environment and humankind.
To select investments that maintain these essentials, a process for classifying the value of human-friendly companies exists to help investors make sound investment decisions. Backed by the Golden Rule, sustainability-focused investors use a technique called quantification to weigh the costs and benefits of a company’s behavior. The end of the process results in a numerical value that ultimately measures the overall value it provides humanity.
The resulting values representing each investment opportunity are then ranked within the investor’s profile, with those most sustainable at the top and those needing the most work at the bottom. Investments not considered sustainable enough are excluded from the investor’s investment profile. Read on to learn more about the ways in which sustainability-focused investors go about the process of ranking human-friendly companies.
Ranking Human-Friendly Companies With Quantification
The value assigned to the company’s overall value represents its contribution to humankind. Using quantitative analysis, a series of variables are considered to measure the costs and benefits of a company’s behaviors in society; this is the way that investors practice ranking human-friendly companies. Some of the principal values measured include economic, financial, and societal values and the pros and cons that a company’s business activities produce for society.
How The Investment Profile Is Organized
The objective of the quantification process is to calculate a single dollar amount that reflects a company’s overall value and respective worth in regard to its human impact. Investors ranking human-friendly companies consider variables like economic influence and the glaring real-world factors that impact humanity. Investors with less experience quantifying human impact will work with seasoned investment firms to carry out this phase of the company ranking process.
Themes For Consideration
In addition to the quantification process, specific themes influence how investors rank human-friendly companies. The common themes typically considered include:
- A company’s behavior
- Access and maintenance of clean water
- The number of years that can be added to human life because of the positive contributions and activities upheld by the company
- Hygiene, sustainable agriculture, medical service accessibility, etc., are a few thematic components investors review to consider ranking human-friendly companies.
Accurate Results Call For Proper Quantification And Company Analysis
The process of ranking human-friendly companies includes quantification whereby a dollar amount is used to correlate with the overall value a company’s actions and accumulated efforts produce for humanity. For investors to obtain accurate company analyses, the help of a firm experienced with quantification is needed to break things down into a single dollar amount.
