What is Guide to Socially Responsible Investments (SRI)?

Socially responsible investing (SRI) is an investment strategy that focuses on investing in businesses which pursue environmentally friendly, socially conscious strategies and objectives. It is characterized as having a positive social and environmental impact while still achieving a financial return on investments. Investors may choose businesses based on criteria such as environmental protection, gender equality, or human rights.

SRI funds may focus on particular sectors such as clean energy, socially conscious consumer products, or initiatives such as micro-financing or fair-trade. They may also exclude certain sectors such as weapons or animal testing. Beyond this, SRI funds may adopt other criteria, such as selecting companies with a good corporate social responsibility record and sustainability policy.

Socially responsible investing has been gaining popularity in recent history. Many investors are now looking for ways to align their investments and money with their values. In addition to individual investors, institutional investors have begun to adopt a socially responsible approach to investing, as evidenced by the continued growth of the sector.

For investors looking to pursue a socially responsible investment strategy, researching and understanding what it commercially viable options exist is essential. Fortunately, there are numerous resources available to help investors get started. A number of magazines, websites, and newsletters offer advice and guidance on socially responsible investing, and some actively rate SRI funds. The SRI World Group provides resources and a directory of SRI services and funds.

Investors should keep in mind that socially responsible investments are still investments and be sure to weigh the potential for return when making decisions. Risk management is still a component of investing and investors should keep this in mind when selecting funds for their portfolio. Additionally, not all SRI funds are created equal, and different funds may focus on different objectives.

Community investing is a type of investing where the return is measured on the impact that the investment has in the local community, rather than the monetary return generated. These investments often focus on local businesses, housing projects, or community projects. These investments tend to be more complex and require more research than traditional investments.

Overall, socially responsible investments entail a multi-faceted approach to investing. Investors who are looking to pursue SRI should make sure to do their research and understand their own risk tolerance levels before choosing an appropriate fund for their portfolio. This will help ensure that investors are making investments that provide a financial return, as well as deals that benefit society, the environment, and the long term.