Solar as a Socially Responsible Investment (SRI)
In today’s society, consumers evaluate the manufacturing process behind a product and the values of companies more than ever before. While this makes business more challenging, it also promotes positive change. Customers no longer only look at the cheapest product. They want products that come from sustainable sources. They care about companies that take responsibility for the impact they have on the earth.
What it Means to Make a Socially Responsible Investment (SRI)
A socially responsible investment (SRI) generates both social change and a financial return. Although coined in 2004 from a UN study, the practice started in the 1970s.
While typically this term refers to investors purchasing stock, it could also refer to the consumer who invests in the product. The investments in SRI vary from renewable energy and recycled products to women-owned brands and companies that support marginalized groups. The values of the investor determine what companies end up in their portfolio.
Another part of SRI includes divesting from companies that don’t show social responsibility. Many investors have decided to divest from companies that discriminate or don’t show interest in helping the environment.
The Performance of SRI
In the past, investments in socially responsible brands have gotten negative pushback. Some professionals argued that this investment strategy isn’t stable. However, studies like the Why ESG study by Arabesque have evidence to prove otherwise.
Arabesque found that investing in socially responsible companies not only promotes long-term thinking and positive societal and environmental impact. It also minimizes stock volatility and drawdowns.
How Residential Solar Fits Into SRI
Investing in solar helps investors who value clean air align their lifestyle with their values. The solar panel manufacturing process isn’t the cleanest. However, because each solar panel lasts over 40 years, this energy choice is a more environmentally conscious energy option. The recent focus on solar panel recycling will also help decrease the carbon footprint of future solar panel manufacturing.
The Best Way to Invest in Residential Solar
While you can add solar installation companies to your investment portfolio, the best way to invest in residential solar is to install an array on your home. This form of investment allows investors to enjoy the benefits that solar provides.
The Benefits of Adding Residential Solar to Your Home
Those who add solar panels help clean the air in their area by decreasing their carbon footprint. However, they also save money on their electricity. Depending on the solar payment plan that the homeowner chooses, solar can also increase their home’s value.