If it costs more to be a socially and environmentally conscious company, what’s a fair return on investment?

5, 6, 7%?

I know this depends on individual needs too.

There are some investments I’d be happy with a 5% return on, if profits were secondary to ethical decisions.

This is me looking into $POSH and $BIRD

I don’t think they’re great businesses or great values but I’m interested in investing in them bc their B Corp status and their sustainable business models. I wouldn’t be interested if I thought they were crap companies either. I’m not looking to lose money in them. As an exercise in thinking about socially responsible investing, if it costs more or profits less for the company, obviously, it follows that investment returns will be lower.

One interesting way I think this could impact valuations though is if you have a large enough block of investors with this mindset, you’ll have higher valuations and multiples on these companies because of the different set of reasons and expectations for an investment in the companies. I don’t care and other investors don’t care if it’s overpriced by standard valuations that could diminish future returns because the expected return is already lower and there’s more emphasis on how the company is responsible rather than exceedingly profitable. With the caveat being of course that the company is a well run business overall.