Balancing Social and Financial Returns

Balancing Social and Financial Returns

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Balancing Social and Financial Returns

Many of the articles you read about business acting as a force for good in the world tend to be a bit light. Not this one. It’s quite thoughtful. Here’s the highlight if you can’t spare the time to read the full piece: 

It may be that if we want better companies, we have to change the way we invest in them. Our expectations for good are only worth as much as what we’re prepared to suffer as investors. If we expect bigger and faster returns all of the time, it’s not surprising that we end up with companies that are less good than we want.

“It’s immensely fulfilling for people to come into contact with what their money is doing,” he says. “People think investors want higher returns and the borrowers would rather have lower rates of interest to pay. But that doesn’t happen. Often, it’s the opposite. Invariably, the investors stand up and say, ‘This environmental and social impact you’re having is so compelling that if you want less return, I can probably do that.'”

Personal connection changes the nature of transaction and leads to a more cooperative, human-sized arrangement, Shaffer says. In other words, it’s the exact opposite of what happens when you invest in a mutual fund, and you’re 10 steps away from what a company does with your money. In the future, we need to build more direct, accountable relationships into investing, so we knew where our capital is going. Replicating something like RSF’s pricing meetings on a larger scale—say, in agreeing on the size of shareholder dividends—would lead to a more responsive type of enterprise. Could Wall Street organize quarterly forums where companies and investors would discuss the ratio of financial to social returns?


  1. Spot on! Thank you Gideon Rosenblatt 

  2. Very Good !!! Gideon Rosenblatt​

    Personal “Connectivity” and #Accountabilities …

    The Glass-Steagall ACT need to be redacted maybe a new name …

    Separate individual banking and investment banking … #USBigBanks have become a dictatorship

  3. Thanks Zara Altair and Coach G Moore.

    It’s too bad that Bernie Sanders didn’t make that Glass-Steagall connection  during the latest debate when Clinton asked to point to a single place where her funding interfered w/ her positions. No question that the finance sector has been a big driver in the unwillingness to sacrifice any degree of financial return in order to balance social/ecological returns. That willingness to face that question is part of what’s refreshing about this piece.

  4. Hi again Gideon …

    Another thing to consider is “Trading” with “discretion” … originally the

    Mutual Funds used discretion which was good … But now that the market is

    cornered by the #UsBigBank discretion is abused to create #Velocity …

    Markets are churned via 401K retirement savings and other Retirement

    accounts regulated by ERISA … The little guys and gals have their

    “Retirement Funds” at Super High Risk …

  5. It’ll be interesting to see what impact the new brokerage rules have on this, Coach G Moore.

  6. Great post.Goodmorning Sir Gideon Rosenblatt​…your post was extremely helpful and thought provoking …thanks a lot for sharing the summary … resharing now😀

  7. Thanks Debanjali Das. I’m glad that you liked it. Thanks for sharing. 

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