Socially Responsible Investing (SRI) (2024)

  • Sustainable Investing
  • Socially Responsible Investing

Socially Responsible Investing (SRI) involves investing in companies that promote ethical and socially conscious themes including environmental sustainability, social justice, and corporate ethics, in addition to fighting against gender and sexual discrimination.

Socially Responsible Investing (SRI)

Top Green Investing OpportunitiesByJames McWhinneyUpdated Dec 30, 2023 The 3 Pillars of Corporate SustainabilityByAndrew BeattieUpdated Mar 01, 2024 The 5 Countries That Produce the Most Carbon Dioxide (CO2)ByAndriy BlokhinUpdated Dec 05, 2023 Why Social Responsibility Matters to BusinessesByChris B. MurphyUpdated Jan 27, 2024 A Look at One of the Largest Sustainable Investing ETFsByTodd ShriberUpdated Dec 18, 2023

Frequently Asked Questions

  • Why is socially responsible investing (SRI) important?

    While investing is an excellent way to build wealth over time, it can be difficult to reconcile a desire to make money with potentially supporting companies that have a negative impact on the environment and our society. Socially responsible investing (SRI) is a solution to this dilemma, as it gives people the opportunity to make more ethical investment decisions. It is also a somewhat subjective concept, as how an investor practices SRI will reflect their personal values and morals.

    Learn MoreThe Value in Socially Responsible Investing

  • What are the differences between SRI and ESG?

    Socially responsible investing (SRI) is the practice of actively avoiding investments that conflict with an investor’s ethical beliefs. Environmental, social, and governance (ESG) refers to a set of criteria used to analyze the sustainability of a company’s behaviors and policies. Investors that practice SRI can use ESG as a tool to screen investments that conflict with their values.

  • What are the differences between SRI and CSR?

    Socially responsible investing (SRI) is a type of investing that excludes companies failing to behave in a socially responsible manner. Corporate social responsibility (CSR) is a model that businesses can follow to ensure they are operating in a socially responsible manner. By utilizing SRI, investors can incentivize companies to follow the CSR model.

    Learn MoreCorporate Social Responsibility: Top Trends

  • Does socially responsible investing hurt investment returns?

    Several studies have found that returns aren’t negatively impacted when investors invest in companies that align with their values. This has also proven to be the case if they exclude popular businesses with poor ESG practices. In 2021, the Morgan Stanley Institute for Sustainable Investing found companies that focused on ESG factors weathered the economic volatility of COVID-19 better than their non-ESG counterparts.

    Learn MoreA History of Impact Investing

Key Terms

  • Environmental, Social, and Governance (ESG) Criteria

    Environmental, social, and governance (ESG) criteria are a set of standards that can be utilized by investors to evaluate whether companies are behaving responsibly and enforcing policies that promote environment protections, ethical relationships, and accountable leadership. These criteria also help investors steer clear of companies that may face consequences for dangerous or unethical behavior.

    Learn More

  • UN Principles for Responsible Investment (PRI)

    The UN Principles for Responsible Investment (PRI) is a United Nations-supported network of investors who work to identify, promote, and ensure the adoption of environmental and sustainability practices within financial institutions. Originally founded in 2006, the PRI works with over 200 financial institutions and has 7,000 corporate signatories across 135 countries.

    Learn More

  • Impact Investing

    Impact investing is an investing strategy designed to put money toward positive societal change while still generating returns. Socially responsible investing (SRI) and environmental, social, and governance (ESG) investing are two of the most well-known forms of impact investing.

    Learn More

  • Corporate Accountability

    The term “corporate accountability” is a measurement of how a publicly traded company has operated in areas outside of its financial performance, primarily regarding sustainability and social responsibility. Businesses often voluntarily publish corporate accountability reports for the benefit of both their shareholders and the general public.

    Learn More

  • Corporate Social Responsibility (CSR)

    Corporate social responsibility (CSR) is a self-regulating business model that companies can use to ensure they are remaining socially accountable to themselves, shareholders, and the public when conducting business. CSR has the benefit of both improving society and the environment as well as bolstering a company’s public image.

    Learn More

  • Socially Responsible Investment (SRI)

    A socially responsible investment (SRI) is a type of investment that is intended to align with the investor’s ethical principles. SRIs can take the form of purchasing shares of companies that support environmental sustainability or social justice as well as investments into a mutual fund or ETF that eschews any companies with ties to the production and/or sale of addictive substances.

    Learn More

  • Social Audit

    A social audit is a formal, internal examination of a company's operations and policies in terms of how its business impacts society. These kinds of audits allow companies to analyze whether or not they are striking a balance between social responsibility and profitability.

    Learn More

  • Carbon Trade

    Carbon trade refers to the buying and selling of government-authorized credits that permits an organization to emit a limited amount of carbon dioxide (as well as other kinds of greenhouse gas). The idea behind carbon trading is to motivate nations to reduce their carbon emissions so that they will have additional permits that they can then sell.

    Learn More

How to Tell If a Company Has High ESG ScoresByAdam HayesUpdated Jul 27, 2023 Why Is Social Responsibility Important in Marketing?ByThe Investopedia TeamUpdated May 01, 2022 Carbon Trade: Definition, Purpose, and How Carbon Trading WorksByWill KentonUpdated Sep 01, 2022 How to Invest in ESGByBarbara A. FriedbergUpdated Aug 19, 2023 Great Society: What it Was, Legacy and FAQByJames ChenUpdated Jun 30, 2023
Racial Justice Investing: What It is, How It WorksByAdam HayesUpdated Nov 01, 2022 MSCI ESG Ratings Definition, Methodology, ExampleByAdam HayesUpdated Oct 05, 2022 Solar Energy: Benefits and DrawbacksByMatthew JohnstonUpdated Aug 05, 2022 Top Socially Responsible Bond ETFs for 2022ByCharles MunyiUpdated Oct 01, 2022 Beauty Brands Tackle Greener PackagingByShelley GoldbergUpdated Apr 30, 2023 A New Approach to ESG ScoringByPaul O. EllisUpdated Nov 16, 2022 Data Availability Drives ESG Investing SurgeByChristopher SonzogniUpdated Nov 01, 2022 Social Choice Theory: What it is, How it Works, ExampleByClay HaltonUpdated Sep 25, 2022 Protest Divestment and the End of ApartheidByGregory GethardUpdated Jul 03, 2022 What Is Green Marketing? Definition, Example and How It WorksByJason FernandoUpdated Apr 15, 2024 Ethical Investing: Overview and How To Do ItByWill KentonUpdated May 20, 2022 UN Principles for Responsible Investment (PRI)? DefinitionByJason FernandoUpdated Jun 12, 2022 Top 5 Mutual Funds for Impact Investing ByKevin B. JohnstonUpdated Nov 01, 2022 Green Fund: What it is, How it Works, FAQsByJames ChenUpdated Jun 22, 2022 Sinful Investing: Is It for You?ByThe Investopedia TeamUpdated May 01, 2022 Sin Stock: What it is, How it Works, Pros and ConsByWill KentonUpdated Apr 14, 2022 What Does It Mean to Be Green?ByLisa SmithUpdated Jun 30, 2022 ISO 14001: What it is, How it Works, ExampleByJason FernandoUpdated Jul 12, 2022 Paris Agreement/Cop21: Meaning, History, Structure ByAmy FontinelleUpdated Dec 01, 2022 Islamic Investment Policy: What it is, How it WorksByMarc L. RossUpdated May 15, 2022 Sustainable Business 20 (SB20)ByWill KentonUpdated Jun 21, 2022 The Value in Socially Responsible InvestingByMarc L. RossUpdated Jul 26, 2022 Corporate Accountability: Definition, Examples, ImportanceByJames ChenUpdated Jul 13, 2022 Guide to Socially Responsible Investments (SRI)ByJames ChenUpdated Nov 01, 2022 FTSE4Good Index Series: What it is, How it Works, ExamplesByJason FernandoUpdated May 03, 2023 Msci Kld 400 Social Index: Meaning, Example, FAQsByJason FernandoUpdated May 03, 2023 Fair Trade Investing: What It is, How it WorksByAndrew AnchetaUpdated Jun 30, 2022 Leeds School of Business: What It is, OverviewByJason FernandoUpdated Oct 30, 2022 Community Investing: What It Is, How It Works, ExamplesByJason FernandoUpdated Jun 30, 2022 Impact Investing vs. Venture PhilanthropyByDan MoskowitzUpdated Feb 24, 2022 Socially Responsible Investing (SRI) vs. Sin StocksByLisa SmithUpdated Sep 27, 2022 Go Green With Socially Responsible InvestingByZoe Van SchyndelUpdated May 20, 2022 Wahed Invest: A Look at the Islamic Robo-AdvisorByTJ PorterUpdated Sep 01, 2023 Understanding the Basics of Mitigation BankingByVikram JhawarUpdated Jan 31, 2022 Corporate Social Responsibility: Tracking the Top TrendsByThe Investopedia TeamUpdated Jul 14, 2022 How Did Johnson and Johnson's Corporate Responsibility Policy Pay Off in 1982?ByThe Investopedia TeamUpdated Aug 27, 2022 Investing in Unethical Stocks: Pros and Cons for TradersByLewis R. HumphriesUpdated Jul 20, 2022 Impact Investing: Definition, Types, and ExamplesByJames ChenUpdated Mar 03, 2024 What Is ESG Investing?ByThe Investopedia TeamUpdated Mar 21, 2024 What Is the Green New Deal?ByDeborah D'SouzaUpdated Feb 12, 2024 Green Economics: Overview, Criticisms, FAQByClay HaltonUpdated Jun 04, 2023 United Nations Global Compact: Definition, Purpose, 10 PrinciplesByWill KentonUpdated Sep 12, 2022 Carbon Disclosure Rating: What it is, How it Works, ExampleByJason FernandoUpdated Jun 27, 2023 Cleantech: Term for Environmentally-Friendly Practices and TechByJason FernandoUpdated Jul 01, 2022 What Is Green Tech? How It Works, Types, Adoption, and ExamplesByWill KentonUpdated Apr 07, 2024 Green Levy: What It Is, How It Works, ExamplesByWill KentonUpdated Jul 21, 2022 Social Audit: Definition, Items Examined, and ExampleByChris B. MurphyUpdated Apr 24, 2024 Climate Finance: Meaning, Contributors, ExampleByJason FernandoUpdated Jul 31, 2023 Conscious Capitalism: Definition, 4 Principles, and Company ExamplesByWill KentonUpdated Jan 05, 2024 What Is CSR? Corporate Social Responsibility ExplainedByJason FernandoUpdated Mar 06, 2024 Social Impact Statement: Meaning, Criticisms, ExampleByJason FernandoUpdated Oct 10, 2022 Social Impact Bond (SIB): Definition, How It Works, and ExampleByJames ChenUpdated Apr 12, 2022 A History of Impact InvestingByJames LumbergUpdated Sep 12, 2022 3 Trends to Watch in ESG InvestingByGreg DePersioUpdated Jan 30, 2023 How Do ESG, SRI, and Impact Funds Differ?ByMark P. CussenUpdated Nov 01, 2022 Dow Jones Sustainability North America Index OverviewByAdam HayesUpdated Jun 29, 2022 The Rise of the Socially Responsible ETFsByNathan ReiffUpdated Oct 15, 2022 Socially Responsible Mutual FundsByShauna CroomeUpdated Aug 25, 2022 The Top 5 Impact Investing FirmsByJ.B. MaverickUpdated Jul 05, 2023 Socially Responsible Investment for Gender EmpowermentByLeslie KramerUpdated Nov 01, 2022

Page Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.

  1. The Forum for Sustainable Investing. "Financial Performance With Sustainable Investing."https://www.ussif.org/performance

Socially Responsible Investing (SRI) (2024)

References

Top Articles
Latest Posts
Article information

Author: Errol Quitzon

Last Updated:

Views: 5861

Rating: 4.9 / 5 (79 voted)

Reviews: 94% of readers found this page helpful

Author information

Name: Errol Quitzon

Birthday: 1993-04-02

Address: 70604 Haley Lane, Port Weldonside, TN 99233-0942

Phone: +9665282866296

Job: Product Retail Agent

Hobby: Computer programming, Horseback riding, Hooping, Dance, Ice skating, Backpacking, Rafting

Introduction: My name is Errol Quitzon, I am a fair, cute, fancy, clean, attractive, sparkling, kind person who loves writing and wants to share my knowledge and understanding with you.