What is Values-Based Investing?
Values-based investing is a subset of impact investing that aligns financial investments with the investor's personal values and ethics. It emphasizes not just the financial return but also the social, environmental, and community impact of the invested capital. Within the framework of community investing, values-based investors focus on funding projects and businesses that strengthen local economies, promote social justice, and enhance the quality of life in under-resourced areas.
This approach seeks to redirect capital into communities that are often overlooked by traditional financial institutions. Community investing typically involves funding community development financial institutions (CDFIs), affordable housing, local businesses, and social enterprises that serve marginalized populations.
Investors may look for opportunities that support job creation, affordable healthcare, education, and environmental sustainability. By prioritizing community enhancement alongside financial returns, values-based investing fosters a sense of alignment between an investor’s financial goals and their desire to effect positive social change.
In summary, values-based investing in the context of community investing represents a powerful tool for individuals and institutions looking to make a meaningful difference while achieving their financial objectives. It embodies a holistic perspective of wealth that considers not only the capital but also the well-being of communities.