Socially Responsible investing, often shortened to “SRI” is about matching investments to a person’s social values.
SRI focuses on selecting investments where consideration is given to the activities of a business and the impact they may have on the wider community and environment.
Negative Screening - Screening for companies that are assessed as having an overall negative effect on society.
Positive Screening - Screening for companies behaviour on ESG issues as well as investment in underserved community segments.
The most common exclusions are when environmental, social and ethical harm occurs by a company that provides a service or product. Such as a company that is involved in:
Addictive substances such as Tobacco or Alcohol
Energy related (nuclear or fossil fuels)
Investment in ethical funds that exclude such companies jumped 2500 percent to $42.7 billion by the end of 2016, up from $1.6bn in 2015, a Responsible Investment Association of Australasia (RIAA) report showed.“The world is on the brink of a revolution in how we solve society’s toughest problems. The force capable of driving this revolution is ‘Social Impact Investing’, which harnesses entrepreneurship, innovation and capital to power social improvements.” - G8 Social Impact Taskforce, 2014