Socially Responsible Investing (SRI)

Socially Responsible Investing (SRI) is an investment strategy that seeks to generate financial returns while also promoting positive social or environmental outcomes.

Example

An investor builds a portfolio of companies focused on renewable energy, ethical labor practices, and gender equality, aligning with their values of sustainability and social justice.

Key points

• Combines financial returns with social or environmental impact.

• Avoids industries deemed harmful, like tobacco or fossil fuels.

• Focuses on companies with positive ethical and sustainability practices.

Quick Answers to Curious Questions

How do SRI investors choose which companies to invest in?

They screen for companies that align with their ethical values and have strong social, environmental, and governance practices.

What distinguishes SRI from other forms of impact investing?

SRI often excludes harmful industries, whereas impact investing focuses more on actively funding initiatives that generate measurable social or environmental benefits.