Teaching Kids about Socially Responsible Investing

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Table of Contents

In today’s world, teaching children about responsible financial decision-making is more important than ever. As society becomes increasingly aware of environmental, social, and governance (ESG) issues, it’s essential to instill in the younger generation a sense of social responsibility when it comes to investing. Introducing kids to the concept of socially responsible investing can empower them to make a positive impact on the world while growing their financial literacy. So what exactly is an SRI, and what is SRI investing?

Let’s explore the importance of teaching kids about socially responsible investing, the key principles to impart, and practical ways to engage children in this exciting journey. So, grab a snack and gather the little ones—it’s time to embark on an educational adventure into the world of investing with a conscience!

What is Socially Responsible Investing (SRI) and why is it important to teach kids about it?

First, what is SRI investing? Socially Responsible Investing (SRI), also known as sustainable investing or ethical investing, is an investment approach that considers both financial return and the social and environmental impact of companies. It involves selecting investments in companies that align with certain values, such as environmental sustainability, social justice, diversity, and corporate governance practices. SRI allows investors to support businesses that are making positive contributions to society while avoiding those that may be harmful or unethical.

Teaching kids about socially responsible investing is vital for several reasons. First, it cultivates a sense of social consciousness and responsibility, encouraging children to consider the impact their investments can have on the world. By introducing them to the concept of SRI, we empower them to use their financial resources as a force for positive change.

Second, teaching kids about SRI helps develop their financial literacy and critical thinking skills. It encourages them to think beyond financial gain and consider the ethical implications of their investment choices. They learn to evaluate companies based on their social and environmental practices, becoming informed investors who make conscious decisions aligned with their values.

Furthermore, introducing kids to SRI fosters a long-term perspective on investing. It teaches them that financial success is not only measured by profits but also by the positive impact they can have on society. By instilling these values early on, we create a generation of investors who prioritize both financial returns and the greater good.

Overall, teaching kids about socially responsible investing empowers them to become informed, responsible, and socially conscious investors who can contribute to building a more sustainable and equitable future.

How can parents introduce the concept of social responsibility to kids?

Introducing the concept of social responsibility to kids can be an engaging and enlightening experience. Here are some practical ways parents can foster an understanding of social responsibility:

1. Lead by Example: Parents can demonstrate social responsibility in their own lives by making ethical choices, supporting causes they care about, and discussing their actions with their children. Children often learn by observing their parents’ behavior, so being a positive role model is crucial.

2. Engage in Volunteer Work: Involve children in age-appropriate volunteer activities that align with their interests. This could include volunteering at a local charity, participating in community clean-up initiatives, or helping out at a food bank. These experiences expose children to the needs of others and instill empathy and compassion.

3. Use Everyday Examples: Teach children to think critically about the impact of their actions. Discuss topics like recycling, conserving energy, and reducing waste. Encourage them to make responsible choices, such as using reusable water bottles or shopping at stores that prioritize sustainable practices.

4. Explore Socially Responsible Businesses: Introduce children to companies that prioritize social and environmental values. Discuss how these businesses contribute positively to society and engage in conversations about their ethical practices. Encourage children to support these businesses when making purchasing decisions.

5. Read Books and Watch Movies: Choose books and movies that highlight social responsibility themes. These stories can spark meaningful discussions and help children understand the importance of making a positive impact. Discuss the characters’ choices and encourage children to think about how they would act in similar situations.

6. Discuss Financial Choices: When teaching kids about money management, incorporate discussions about socially responsible investing. Explain the concept of investing in companies that align with their values and the potential impact it can have on society. Encourage them to research companies and make informed choices.

7. Encourage Philanthropy: Help children identify causes they are passionate about and explore ways they can contribute. Whether it’s donating a portion of their allowance or organizing a fundraising event, philanthropy encourages children to actively participate in making a difference.

Remember, introducing social responsibility to kids should be an ongoing conversation. Encourage their curiosity, answer their questions, and provide age-appropriate information to help them develop a strong sense of social consciousness and responsibility.

What are some examples of socially responsible investment criteria?

While considering socially responsible investment criteria, several factors related to environmental sustainability, social impact, and ethical governance can be taken into account. Here are some examples of criteria commonly used in socially responsible investing: 

1. Environmental Sustainability:

  •  – Renewable Energy: Investing in companies that focus on renewable energy sources such as solar, wind, or hydroelectric power.
  •  – Carbon Footprint: Selecting investments in companies with low greenhouse gas emissions and sustainable practices to mitigate climate change.
  •  – Water Conservation: Supporting companies that prioritize efficient water usage and promote water conservation initiatives.

Here are some examples of socially conscious stocks  that prioritize renewable energy and reduce carbon emissions:

Tesla, Inc.: Tesla is a renowned electric vehicle and clean energy company. Their mission is to accelerate the world’s transition to sustainable energy. They produce electric cars, solar energy products, and energy storage solutions, aiming to reduce reliance on fossil fuels and combat climate change.

Unilever: Unilever is a global consumer goods company that prioritizes environmental sustainability through its Sustainable Living Plan. They focus on reducing their environmental impact by promoting sustainable sourcing, water and waste management, and developing products with a lower carbon footprint. They are committed to being a leader in sustainable business practices.
Ørsted: Ørsted is a Danish renewable energy company that has transitioned from a fossil fuel-based business to a renewable energy powerhouse. They are a global leader in offshore wind energy, contributing significantly to the reduction of carbon emissions. Ørsted is committed to creating a world that runs entirely on green energy.

Interface, Inc.: Interface is a modular carpet manufacturer that has set ambitious sustainability goals. They aim to eliminate negative impacts on the environment by using recycled materials, reducing greenhouse gas emissions, and creating products with a lower environmental footprint. They strive to be a restorative and regenerative force for the planet.

These companies serve as excellent examples of how businesses can integrate environmental sustainability into their operations and contribute to a more sustainable future. By prioritizing environmentally friendly practices, they demonstrate the positive impact that companies can have on the planet while maintaining successful business models.

2. Social Impact:

  •    – Diversity and Inclusion: Investing in companies that value diversity in their workforce and foster an inclusive corporate culture.
  •    – Labor Standards: Considering companies that uphold fair labor practices, provide safe working conditions, and respect workers’ rights.
  •    – Community Engagement: Supporting companies that actively engage with local communities, contribute to social development, and address community needs.

Socially conscious stocks that promote social justice, quality, and diversity in their workforce include: 

Starbucks Corporation (NASDAQ: SBUX): Starbucks has a reputation for its commitment to social responsibility and sustainability. They prioritize ethical sourcing of coffee beans, support fair trade practices, and invest in programs that empower coffee farmers and promote environmental conservation. Starbucks also offers comprehensive employee benefits and engages in community initiatives.

Nike, Inc. (NYSE: NKE): Nike is known for its efforts to promote social impact, particularly in the areas of sustainability and social justice. They have set ambitious sustainability goals, including targets for reducing carbon emissions and achieving zero waste. Nike supports community initiatives through its Nike Community Impact Fund and invests in programs that empower underprivileged youth through sports.

Warby Parker: Warby Parker is an eyewear company that combines fashion and social impact. For every pair of glasses sold, they provide a pair to someone in need. Their “Buy a Pair, Give a Pair” program aims to address the global vision care crisis and make eyewear accessible to those who cannot afford it.

Salesforce: Salesforce, a leading customer relationship management (CRM) company, is dedicated to corporate social responsibility. They prioritize philanthropy and employee volunteerism through their “1-1-1 model,” where they donate 1% of their equity, 1% of their product, and 1% of their employee time to charitable causes. They actively support education, equality, and environmental sustainability.

These companies demonstrate the importance of integrating social impact into business models. They use their resources and platforms to address social issues, support communities in need, and drive positive change. By aligning their operations with their social missions, these companies showcase the power of business to make a meaningful impact beyond financial success.

3. Ethical Governance:

  •    – Corporate Transparency: Investing in companies that prioritize transparency in their operations and financial reporting.
  •    – Avoidance of Controversial Industries: Excluding investments in industries such as tobacco, weapons, or gambling that may be considered harmful or unethical.
  •    – Responsible Supply Chain: Considering companies that maintain ethical practices throughout their supply chains, ensuring fair treatment of workers and sustainable sourcing of materials.

Here are socially responsible stocks with transparent and accountable leadership: 

 The Coca-Cola Company (NYSE: KO): Coca-Cola has made efforts to promote ethical governance throughout its operations. The company is committed to transparency, ethical conduct, and accountability. Coca-Cola has implemented policies and practices to ensure compliance with ethical standards and has established governance structures to foster integrity and responsible decision-making.

Visa Inc. (NYSE: V): Visa places a strong emphasis on ethical governance and responsible business practices. The company is committed to maintaining the highest ethical standards in its operations, promoting integrity, and preventing corruption. Visa has robust governance frameworks, policies, and compliance programs to ensure ethical conduct and accountability.

IBM Corporation (NYSE: IBM): IBM is known for its focus on ethical governance and responsible business practices. The company has a comprehensive corporate governance framework that promotes transparency, integrity, and ethical behavior. IBM has strong internal controls and compliance measures to ensure ethical conduct and adherence to legal and regulatory requirements.

 Intel Corporation (NASDAQ: INTC): Intel has a reputation for its commitment to ethical governance and corporate responsibility. The company maintains high standards of integrity and accountability across its operations. Intel’s governance practices prioritize transparency, responsible decision-making, and compliance with laws and regulations.

These public companies exemplify the importance of ethical governance and responsible business practices. They prioritize transparency, accountability, and integrity, demonstrating that ethical behavior can enhance long-term success and foster trust among stakeholders.

It’s important to note that the specific criteria used for socially responsible stocks can vary among investors and funds. Each individual or organization may prioritize different aspects of environmental sustainability, social impact, and ethical governance based on their values and objectives. Conducting thorough research and consulting with professionals in the field can help investors align their investments with their desired social responsibility criteria.

How can kids research and identify socially responsible companies?

Encouraging kids to research and identify socially conscious stocks can be a valuable learning experience. Here are some ways to help kids engage in this process:

  1. Annual Reports and Sustainability Reports: Teach kids about annual reports and sustainability reports published by companies. These reports provide insights into a company’s environmental impact, community engagement, and governance practices. Some companies have dedicated sections on their websites where these reports can be found.
  1. Research News and Media: Encourage kids to follow news related to sustainability, social impact, and ethical practices. Help them understand how companies’ actions can be reflected in news stories and discuss the implications of those actions.
  1. Encourage Critical Thinking: Teach kids to evaluate information critically and consider multiple perspectives. Help them analyze company statements, policies, and actions to assess their authenticity and impact.

By involving kids in the research and identification process, we empower them to become informed and responsible consumers and investors. It also helps develop their critical thinking skills and fosters a sense of social consciousness and responsibility.

Why should kids consider the impact of environmental, social, and governance (ESG) factors?

Considering the impact of environmental, social, and governance (ESG) factors is important for kids for several reasons:

  • Building a Sustainable Future: By understanding and considering the environmental impact of companies, kids can contribute to building a more sustainable future. They can support companies that prioritize sustainable practices, conservation efforts, and renewable energy sources, helping to address pressing environmental challenges such as climate change and pollution.
  • Promoting Social Justice: Kids can use their consumer choices to promote social justice and equality. By considering the social impact of companies, they can support organizations that uphold fair labor practices, promote diversity and inclusion, and advocate for human rights. This helps create a more equitable society and encourages companies to prioritize social responsibility.
  •  Developing Ethical Awareness: Considering governance factors encourages kids to evaluate a company’s ethical standards and corporate behavior. It helps them understand the importance of transparency, accountability, and responsible decision-making. This awareness can shape their own ethical values and guide their future choices as consumers, employees, or investors.
  •  Empowering Young Consumers: Encouraging kids to consider ESG factors empowers them to make informed decisions and become conscious consumers. It teaches them to look beyond marketing tactics and consider the broader impact of their purchasing choices. This empowers them to support companies that align with their values and actively contribute to positive change.
  • Long-Term Thinking: By considering ESG factors, kids develop a long-term perspective on the impact of their decisions. They understand that the actions of companies today can have far-reaching consequences for the environment, society, and governance practices. This cultivates a sense of responsibility and encourages them to make choices that support sustainable and socially responsible practices.

By instilling an understanding of ESG factors in kids, we equip them with the tools to make conscious choices that align with their values and contribute to a better world. It helps them develop a sense of agency and empowers them to be active participants in creating a more sustainable and socially just society.

What are the benefits of socially responsible investing for kids?

For kids, engaging in socially responsible investing can have several benefits including:

Education about Values and Responsibility: Introducing kids to socially responsible investing allows them to learn about important social and environmental issues. It encourages them to think critically about the impact of their financial decisions and helps instill a sense of responsibility towards the world they live in. This can also boost their confidence and sense of efficacy.

Positive Impact on the World: Socially responsible investing aims to support companies that promote social justice, environmental sustainability, and good governance practices. By investing in such companies, kids can contribute to positive change and support initiatives they care about.

Potential for Competitive Returns: Contrary to the belief that socially responsible investing may underperform, many studies have shown that companies with strong environmental, social, and governance (ESG) practices can be financially competitive and sometimes outperform their peers in the long run.

Supporting Ethical Business Practices: Kids can actively choose to support companies that demonstrate responsible business practices, ethical behavior, and transparency. This can create a positive impact by influencing corporate behavior through investor demand.

It is essential to approach socially responsible investing with a balanced perspective, ensuring that kids understand the potential risks and rewards associated with investments. Encouraging them to ask questions, do research, and seek guidance from trusted adults can help them develop a responsible and informed investment approach.

How can parents help kids understand the financial performance of socially responsible investments?

Helping kids understand the financial performance of socially responsible investments can be a valuable educational experience. Here are some strategies parents can use to support their children in grasping this concept:

  1. Discuss Risks and Rewards: Help kids understand that all investments carry some level of risk, including socially responsible ones. Explain that while they can align their values with their investments, the value of the investments can still go up or down.
  1. Encourage Questions: Encourage your kids to ask questions about financial concepts and investments. Create an open environment where they feel comfortable seeking clarification.
  1. Practice Virtual Investing: Use virtual investment platforms or apps that simulate the stock market to let kids practice making investment decisions without real money involved. This can help them grasp the impact of their choices.
  1. Discuss Long-Term Impact: Emphasize that socially responsible investing is about making a positive impact on the world over the long term. Encourage them to think about the broader implications of their investment decisions.
  1. Explore Success Stories: Share stories of successful socially responsible investments that have resulted in positive changes in the world. This can inspire kids and show them that investing responsibly can make a difference.

Remember that patience is crucial when teaching kids about financial matters. Make the learning process enjoyable and relevant to their lives, and be open to ongoing discussions as they develop their understanding of socially responsible investing and financial performance.

How can socially responsible investing help kids shape a sustainable and ethical future?

Socially Responsible Investing can encourage kids to shape a sustainable and ethical but there are other ways SRI can play a significant role in your kids’ lives:

Influencing Corporate Behavior: As investors, kids become part of the shareholder community, and they have the right to voice their opinions and concerns. They can actively engage with companies through shareholder meetings and advocacy efforts to encourage better corporate practices, transparency, and accountability.

Empowering Future Leaders: Through socially responsible investing, kids learn about the power of capital allocation. Understanding how their investment choices impact companies and society empowers them to be thoughtful consumers and informed citizens who can drive positive change in the future.

Addressing Global Challenges: Socially responsible investing focuses on issues like climate change, social inequality, and human rights. By channeling investments towards companies and initiatives that address these challenges, kids actively contribute to finding solutions to some of the world’s most pressing problems.

Inspiring Others: Kids can become advocates for socially responsible investing and inspire their peers, family, and community to consider the impact of their investments. Their actions can create a ripple effect, leading to a broader movement towards sustainable and ethical practices.

Contributing to a Positive Legacy: By shaping a sustainable and ethical future through their investment choices, kids can leave a positive legacy for generations to come. They play an active role in fostering a world that prioritizes the well-being of people, the planet, and future prosperity.

It’s essential for parents, educators, and society as a whole to support and encourage kids in their journey towards socially responsible investing and sustainable practices. By nurturing their values, knowledge, and agency, children can become effective agents of change in building a better future for everyone.


In conclusion, teaching kids about socially responsible investing is a powerful and transformative educational endeavor. By introducing children to the principles of investing with purpose and aligning their financial choices with their ethical values, we empower them to become compassionate, responsible, and forward-thinking global citizens.

If you are thinking about getting involved, a great place to start is Invstr Jr. This platform has all the tools you need such as updated news and media, educational modules, and Fantasy Finance, which lets you practice real-time investing before you start using actual money! 

Teaching kids about socially responsible investing is not merely about growing wealth; it is a journey of cultivating empathy, empathy, and stewardship. As they embrace this holistic approach to investing, they hold the potential to be transformative leaders who will forge a path toward a brighter, more sustainable, and ethical tomorrow for us all.

Happy Investing!

All investing involves risk and can lead to losses.
Past performance does not guarantee future results.
Invstr Financial LLC (Invstr) is registered as an advisor with the SEC. Securities trading is offered to self-directed investors by Social Invstr LLC, a member of FINRA.

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