1. What is socially responsible investing (SRI)?
Socially responsible investing, along with sustainable and impact investing, takes into consideration social, ethical, environmental and corporate governance and applies one or more of these criteria as an additional filter during the investment selection process. Simply put, it is a way for an individual or an organization to match their personal values and beliefs with their investment strategy.
2. Why would someone wish to partake in socially responsible investing?
There are multiple reasons why one might choose to select socially responsible investing as their investment strategy: personal values, institutional missions, or demands of organizational members and plan participants. Some investors even utilize socially responsible investing strategies as a means of managing risk and fulfillment of their fiduciary responsibilities, looking for strategies which could hold sustainable growth over the long term.
3. What are some of major types of socially responsible investing?
The most common types of socially responsible investing include but are not limited to those who are seeking environmentally conscious portfolios, focusing on sustainable and clean energy, and filtering out investment holdings in those areas which are in conflict with their values. Another type of SRI which has been on a steady rise is ethical investing based on personal faith or religious values. These types of strategies focus on adhering to rules and guidelines issued by various councils on ethical and religious investing.
4. What about performance?
Socially responsible investing includes a large and continuously growing range of different products, from mutual funds and exchange traded funds to public equity investments, fixed income and alternative investment strategies such as real estate, private equity and venture capital groups. No different than conventional investors, those who seek SRI are also looking for competitive returns within their investment vehicles.
