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What is Socially Responsible Investing?
- 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
- Gambling
- Weapons Industry
- Adult entertainment
- Energy-related (nuclear or fossil fuels)
- Increasing pollution
Investment in ethical funds that exclude such companies jumped 2500 per cent 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