Socially Responsible Investing

Socially responsible investing (SRI), also known as sustainable, socially conscious, green or ethical investing, is any investment strategywhich seeks to consider both financial return and social good. In general, socially responsible investors encourage corporate practices that promote environmental stewardship, consumer protection, human rights, and diversity. Some avoid businesses involved in alcohol,tobacco, gambling, pornography, weapons, and/or the military. The areas of concern recognized by the SRI industry can be summarized as environment, social justice, and corporate governance — as in environmental social governance (ESG) issues. In addition to stock ownership either directly or through mutual funds, other key aspects of SRI include shareholder advocacy and community investing.

The term “socially responsible investing” sometimes narrowly refers to practices that seek to avoid harm by screening companies included in an investment portfolio. However, the term is also used more broadly to include more proactive practices such as impact investing,shareholder advocacy and community investing. Kelly Gordon Rogers, a prominent member of the socially responsible investing community believes that shareholder advocacy and community investing are pillars of socially responsible investing and that doing only negative screening is not adequate.

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