Socially Responsible Investing (SRI) is an investment strategy that considers both financial returns and social or ethical impacts. It involves selecting investments based on criteria that reflect the investor's values, such as environmental sustainability, social justice, and ethical governance. SRI aims to support companies that make a positive contribution to society while avoiding those that engage in harmful practices, thereby promoting a more sustainable and equitable economy.
A financial advisor may use Socially Responsible Investing (SRI) to help clients who prioritize ethical investing by creating a portfolio that includes clean energy companies, sustainable agriculture firms, and businesses with strong labor practices, ensuring their investments reflect their values while still aiming for financial growth.
Socially Responsible Investing (SRI) is an investment strategy that allows individuals and institutions to invest in companies that align with their personal or organizational values, focusing on social, ethical, and environmental principles. SRI investors typically seek to support businesses that contribute positively to society while avoiding those involved in practices considered harmful, such as tobacco production, fossil fuels, or unethical labor practices. SRI often involves a combination of financial analysis and non-financial criteria, such as a company's environmental impact, human rights record, or corporate governance practices. These criteria are commonly referred to as Environmental, Social, and Governance (ESG) factors. By integrating ESG considerations into their investment decisions, socially responsible investors aim to generate financial returns while promoting positive change in the world. An example of SRI in action is choosing to invest in renewable energy companies, which contribute to reducing carbon emissions and combating climate change. This type of investment not only offers the potential for financial growth but also aligns with the investor's commitment to sustainability and ethical responsibility.