A quest for a socially responsible model

Avinash Gandhi ’10 is in the process of founding a socially responsible investing group for undergraduates with the backing of the Yale Student Environmental Coalition. The News spoke with Gandhi about the group, investing and social responsibility.

Q Why are you founding a socially responsible investing group?

A In light of the current turmoil on Wall Street, I was struck by the fact that money managers make money regardless of how well they manage their clients’ money. They have little incentive to turn a profit, let alone invest in a socially responsible way. I think that by empowering individual investors to learn about the companies they give money to, we can not only make money, but also support “green” companies.

Q What effects do you think your investing techniques will have?

A Obviously we don’t expect to change the world overnight. From a symbolic perspective, investing is a powerful tool that demonstrates what causes and organizations you support. Beyond that, I think the most valuable effect will be educational. A large number of Yale students go into the financial sector after graduation and experience investing, and investing in a socially responsible way will be very valuable to a lot of people.

Q What is socially responsible investing?

A There is no simple answer. Many people invest in natural gas because they believe it is cleaner and greener than petroleum. I, on the other hand, do not because I believe that the petroleum industry is inherently socially irresponsible. One of our first tasks as a group will be to establish a framework for determining what is responsible and what is not.

Q How will the group operate?

A We have not determined the final structure yet. We will definitely be researching companies for both their financial stability and their responsible practices. We will also be discussing stock picks. Beyond that, we may develop a fund to pool our resources and invest as a group.

Q How would that work?

A We want to make investing more democratic. The investment fund would elect a fund manager who would handle the administrative side of things. The group as a whole would conduct research into potential buys and would have to vote on any transactions.

Q Do you have any previous experience in this sort of project that will help you succeed?

A I have worked for wikinvest.com, which provides a forum for sharing information about companies and market trends. It is a true example of democratic investing. In some respects we are trying to replicate the information-sharing network of sites like wikinvest, while adding to it our commitment to investing only in green companies.

Q How would you gauge student response to the group?

A As of now, I have heard from over 15 students interested in joining the group. I imagine that when we start meeting with regularity we will attract more students. There seem to be a lot of people interested in taking control of their money, and we are hoping to provide them will the resources to do that.

Comments

  • Ron Robins

    Establishing a socially responsible investing group is a great idea. I just want to alert those interested to go to my site which covers the latest global news and research on socially responsible investing. It's at http://investingforthesoul.com/

    Good luck and best wishes, Ron Robins