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Socially responsible investing (SRI), social investment, sustainable socially conscious, "green" or ethical investing, is any
investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...
strategy Strategy (from Greek στρατηγία ''stratēgia'', "art of troop leader; office of general, command, generalship") is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty. In the sense of the "art ...
which seeks to consider both
financial return Return on capital (ROC), or return on invested capital (ROIC), is a ratio used in finance, valuation and accounting, as a measure of the profitability and value-creating potential of companies relative to the amount of capital invested by sharehold ...
and social/environmental good to bring about
social change Social change is the alteration of the social order of a society which may include changes in social institutions, social behaviours or social relations. Definition Social change may not refer to the notion of social progress or sociocult ...
regarded as positive by proponents. Socially responsible investments often constitute a small percentage of total funds invested by corporations and are riddled with obstacles. Recently, it has also become known as " sustainable investing" or "responsible investing". There is also a subset of SRI known as "
impact investing Impact investing refers to investing, investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is ...
", devoted to the conscious creation of social impact through investment. In general, socially responsible investors encourage
corporate A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and re ...
practices that they believe promote environmental stewardship,
consumer protection Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent business ...
,
human rights Human rights are Morality, moral principles or Social norm, normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for ce ...
, and racial or gender
diversity Diversity, diversify, or diverse may refer to: Business *Diversity (business), the inclusion of people of different identities (ethnicity, gender, age) in the workforce *Diversity marketing, marketing communication targeting diverse customers * ...
. Some SRIs avoid investing in businesses perceived to have negative social effects such as
alcohol Alcohol most commonly refers to: * Alcohol (chemistry), an organic compound in which a hydroxyl group is bound to a carbon atom * Alcohol (drug), an intoxicant found in alcoholic drinks Alcohol may also refer to: Chemicals * Ethanol, one of sev ...
,
tobacco Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...
,
fast food Fast food is a type of mass-produced food designed for commercial resale, with a strong priority placed on speed of service. It is a commercial term, limited to food sold in a restaurant or store with frozen, preheated or precooked ingredien ...
,
gambling Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three el ...
,
pornography Pornography (often shortened to porn or porno) is the portrayal of sexual subject matter for the exclusive purpose of sexual arousal. Primarily intended for adults,
,
weapon A weapon, arm or armament is any implement or device that can be used to deter, threaten, inflict physical damage, harm, or kill. Weapons are used to increase the efficacy and efficiency of activities such as hunting, crime, law enforcement, s ...
s,
fossil fuel A fossil fuel is a hydrocarbon-containing material formed naturally in the Earth's crust from the remains of dead plants and animals that is extracted and burned as a fuel. The main fossil fuels are coal, oil, and natural gas. Fossil fuels m ...
production or the
military A military, also known collectively as armed forces, is a heavily armed, highly organized force primarily intended for warfare. It is typically authorized and maintained by a sovereign state, with its members identifiable by their distinct ...
. The areas of concern recognized by the SRI practitioners are sometimes summarized under the heading of
ESG ESG may refer to : Groups * Election Support Group, an internationally sponsored organization analyzing and supporting the electoral process in Pakistan * ES Guelma, an Algerian football club based in Guelma * Escuela Superior de Guerra (Argenti ...
issues: environment,
social justice Social justice is justice in terms of the distribution of wealth, opportunities, and privileges within a society. In Western and Asian cultures, the concept of social justice has often referred to the process of ensuring that individuals fu ...
, and corporate governance. Socially responsible investing is one of several related concepts and approaches that influence and, in some cases, govern how asset managers invest portfolios. The term "socially responsible investing" sometimes narrowly refers to practices that seek to avoid harm by screening companies for ESG risks before deciding whether or not they should be included in an investment portfolio. However, the term is also used more broadly to include more proactive practices such as
impact investing Impact investing refers to investing, investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is ...
, shareholder advocacy and community investing. According to investor
Amy Domini Amy Lee Domini (born January 25, 1950) is an American investment adviser and author known for her work in social investing. Early life and education Amy Lee Domini was born on January 25, 1950, in New York City, to Margot Cabot (Colt), a te ...
, shareholder advocacy and community investing are pillars of socially responsible investing, while doing only negative screening is inadequate. Some rating companies focus specifically on ESG risk ratings as they can be a "valuable tool for asset managers". These ratings firms evaluate companies and projects on several risk factors and typically assign an aggregate score to each company or project being rated. The firms publish reports of their ESG risk findings.


History

The origins of socially responsible investing may date back to the
Religious Society of Friends Quakers are people who belong to a historically Protestant Christian set of denominations known formally as the Religious Society of Friends. Members of these movements ("theFriends") are generally united by a belief in each human's abili ...
(Quakers). In 1758, the Quaker
Philadelphia Philadelphia, often called Philly, is the largest city in the Commonwealth of Pennsylvania, the sixth-largest city in the U.S., the second-largest city in both the Northeast megalopolis and Mid-Atlantic regions after New York City. Sinc ...
Yearly Meeting Yearly Meeting is a term used by members of the Religious Society of Friends, or Quakers, to refer to an organization composed of constituent meetings or churches within a geographical area. The constituent meetings are called Monthly Meetings in ...
prohibited members from participating in the
slave trade Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...
– buying or selling humans. One of the most articulate early adopters of SRI was
John Wesley John Wesley (; 2 March 1791) was an English people, English cleric, Christian theology, theologian, and Evangelism, evangelist who was a leader of a Christian revival, revival movement within the Church of England known as Methodism. The soci ...
(1703–1791), one of the founders of
Methodism Methodism, also called the Methodist movement, is a group of historically related denominations of Protestant Christianity whose origins, doctrine and practice derive from the life and teachings of John Wesley. George Whitefield and John's br ...
. Wesley's
sermon A sermon is a religious discourse or oration by a preacher, usually a member of clergy. Sermons address a scriptural, theological, or moral topic, usually expounding on a type of belief, law, or behavior within both past and present contexts. El ...
"The Use of Money" outlined his basic tenets of social investing – i.e. not to harm your neighbor through your business practices and to avoid industries like
tanning Tanning may refer to: *Tanning (leather), treating animal skins to produce leather *Sun tanning, using the sun to darken pale skin **Indoor tanning, the use of artificial light in place of the sun **Sunless tanning, application of a stain or dye t ...
and
chemical production A chemical substance is a form of matter having constant chemical composition and characteristic properties. Some references add that chemical substance cannot be separated into its constituent elements by physical separation methods, i.e., wit ...
, which can harm the health of workers. Some of the best-known applications of socially responsible investing were religiously motivated. Investors would avoid "sinful" companies, such as those associated with products such as guns,
liquor Liquor (or a spirit) is an alcoholic drink produced by distillation of grains, fruits, vegetables, or sugar, that have already gone through alcoholic fermentation. Other terms for liquor include: spirit drink, distilled beverage or hard ...
, and
tobacco Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...
. The modern era of socially responsible investing evolved during the political climate of the 1960s. During this time, socially concerned investors increasingly sought to address equality for women,
civil rights Civil and political rights are a class of rights that protect individuals' freedom from infringement by governments, social organizations, and private individuals. They ensure one's entitlement to participate in the civil and political life of ...
, and labor issues. Economic development projects started or managed by Dr. Martin Luther King, like the
Montgomery bus boycott The Montgomery bus boycott was a political and social protest campaign against the policy of racial segregation on the public transit system of Montgomery, Alabama. It was a foundational event in the civil rights movement in the United States ...
and the
Operation Breadbasket Operation Breadbasket was an organization dedicated to improving the economic conditions of black communities across the United States of America. Operation Breadbasket was founded as a department of the Southern Christian Leadership Conference ...
Project in Chicago, established the beginning model for socially responsible investing efforts. King combined ongoing dialog with boycotts and direct action targeting specific corporations. Concerns about the
Vietnam War The Vietnam War (also known by #Names, other names) was a conflict in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. It was the second of the Indochina Wars and was officially fought between North Vie ...
were incorporated by some social investors. Many people living during the era remember a picture in June 1972 of a naked nine-year-old girl,
Phan Thị Kim Phúc Phan Thị Kim Phúc (; born April 6, 1963), referred to informally as the girl in the picture and the Napalm girl, is a South Vietnamese-born Canadian woman best known as the nine-year-old child depicted in the Pulitzer Prize–winning phot ...
, running towards a photographer screaming, her back burning from the
napalm Napalm is an incendiary mixture of a gelling agent and a volatile petrochemical (usually gasoline (petrol) or diesel fuel). The name is a portmanteau of two of the constituents of the original thickening and gelling agents: coprecipitated al ...
dropped on her village. That photograph channeled outrage against Dow Chemical, the manufacturer of napalm, and prompted protests across the country against Dow Chemical and other companies profiting from the Vietnam War. During the 1950s and 1960s,
trade union A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...
s deployed multi-employer
pension fund A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides retirement income. Pension funds typically have large amounts of money to invest and are the major investors in listed and priva ...
monies for targeted investments. For example, the
United Mine Workers The United Mine Workers of America (UMW or UMWA) is a North American labor union best known for representing coal miners. Today, the Union also represents health care workers, truck drivers, manufacturing workers and public employees in the Unit ...
fund invested in medical facilities, and the
International Ladies' Garment Workers' Union The International Ladies' Garment Workers' Union (ILGWU), whose members were employed in the women's clothing industry, was once one of the largest labor unions in the United States, one of the first U.S. unions to have a primarily female membe ...
(ILGWU) and
International Brotherhood of Electrical Workers The International Brotherhood of Electrical Workers (IBEW) is a trade union, labor union that represents approximately 775,000 workers and retirees in the electricity, electrical industry in the United States, Canada, Guam, Panama, Puerto Rico, a ...
(IBEW) financed union-built housing projects. Labor unions also sought to leverage pension stocks for shareholder activism on
proxy fight A proxy fight, proxy contest or proxy battle (sometimes even called a proxy war) is an unfriendly contest for the control over an organization. The event usually occurs when a corporation's stockholders develop opposition to some aspect of the corp ...
s and
shareholder resolutions With respect to public companies in the United States, a shareholder resolution is a proposal submitted by shareholders for a vote at the company's annual meeting. Typically, resolutions are opposed by the corporation's management, hence the insis ...
. In 1978, SRI efforts by pension funds was spurred by ''The North will Rise Again: Pensions, Politics, and Power in the 1980s'' and the subsequent organizing efforts of authors
Jeremy Rifkin Jeremy Rifkin (born January 26, 1945) is an American economic and social theorist, writer, public speaker, political advisor, and activist. Rifkin is the author of 23 books about the impact of scientific and technological changes on the economy, ...
and Randy Barber. By 1980, presidential candidates
Jimmy Carter James Earl Carter Jr. (born October 1, 1924) is an American politician who served as the 39th president of the United States from 1977 to 1981. A member of the Democratic Party (United States), Democratic Party, he previously served as th ...
,
Ronald Reagan Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
and
Jerry Brown Edmund Gerald Brown Jr. (born April 7, 1938) is an American lawyer, author, and politician who served as the 34th and 39th governor of California from 1975 to 1983 and 2011 to 2019. A member of the Democratic Party, he was elected Secretary of S ...
advocated some type of social orientation for pension investments. SRI had an important role in ending the apartheid government in South Africa. International opposition to apartheid strengthened after the 1960
Sharpeville massacre The Sharpeville massacre occurred on 21 March 1960 at the police station in the township of Sharpeville in the then Transvaal Province of the then Union of South Africa (today part of Gauteng). After demonstrating against pass laws, a crowd of ...
. In 1971, Reverend
Leon Sullivan Leon Howard Sullivan (October 16, 1922 – April 24, 2001) was a Baptist minister, a civil rights leader and social activist focusing on the creation of job training opportunities for African Americans, a longtime General Motors Board Member, an ...
(at the time a board member for
General Motors The General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. It is the largest automaker in the United States and ...
) drafted a code of conduct for practicing business in South Africa which became known as the Sullivan Principles. However, reports documenting the application of the Sullivan Principles said that US companies were not trying to lessen discrimination in South Africa. Due to these reports and mounting political pressure, cities, states, colleges, faith-based groups and pension funds throughout the US began divesting from companies operating in South Africa. In 1976, the
United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, security, develop friendly relations among nations, achieve international cooperation, and be ...
imposed a mandatory arms
embargo Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they m ...
against South Africa. From the 1970s to the early 1990s, large institutions avoided investment in South Africa under apartheid. The subsequent negative flow of investment eventually forced a group of businesses, representing 75% of South African employers, to draft a charter calling for an end to apartheid. While the SRI efforts alone did not bring an end to apartheid, it did focus persuasive international pressure on the South African business community. The mid and late 1990s saw the rise of SRI's focus on a diverse range of other issues, including tobacco stocks, mutual fund proxy disclosure, and other diverse focuses. Since the late 1990s, SRI has become increasingly defined as a means to promote environmentally sustainable development. Many investors consider effects of
global climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
a significant business and investment risk.
CERES Ceres most commonly refers to: * Ceres (dwarf planet), the largest asteroid * Ceres (mythology), the Roman goddess of agriculture Ceres may also refer to: Places Brazil * Ceres, Goiás, Brazil * Ceres Microregion, in north-central Goiás ...
was founded in 1989 by Joan Bavaria and Dennis Hayes, coordinator of the first Earth Day, as a network for investors, environmental organizations, and other public interest groups interested in working with companies to address environmental concerns. In 1989, representatives from the SRI industry gathered at the first
SRI in the Rockies Conference The SRI Conference is the annual national conference of the sustainable and responsible investing (SRI) industry. The conference was founded in 1990 by George R. Gay, and has grown from 45 to over 1,200 participants. Attendees include investment ...
to exchange ideas and gain momentum for new initiatives. The name has since changed to The SRI Conference which meets annually at Green Building certified establishments and has attracted over 550 persons annually since 2006. This conference is produced by First Affirmative Financial Network, an investment advisory firm that works with advisors nationwide providing portfolios specialized in sustainable and responsible investing. The first sell-side brokerage in the world to offer SRI research was the Brazilian bank
Unibanco Unibanco S.A. was a Brazilian bank which operated from 1924 to 2009, when it was merged into Banco Itaú. The name stood for ''União de Bancos Brasileiros'' ("Union of Brazilian Banks"). Foundation In 1924 João Moreira Salles established the ...
. The service was launched in January 2001 by
Unibanco Unibanco S.A. was a Brazilian bank which operated from 1924 to 2009, when it was merged into Banco Itaú. The name stood for ''União de Bancos Brasileiros'' ("Union of Brazilian Banks"). Foundation In 1924 João Moreira Salles established the ...
SRI analyst Christopher Wells from the
São Paulo São Paulo (, ; Portuguese for 'Saint Paul') is the most populous city in Brazil, and is the capital of the state of São Paulo, the most populous and wealthiest Brazilian state, located in the country's Southeast Region. Listed by the GaWC a ...
headquarters of the bank. It was targeted at SRI funds in Europe and the US, although it was sent to non-SRI funds both in and out of Brazil. The research was about environmental and social issues (but not governance issues) regarding companies listed in Brazil. It was sent for free to Unibanco's clients. The service lasted until mid-2002. Drawing on the industry's experience using divestment as a tool against apartheid, the Sudan Divestment Task Force was established in 2006 in response to the genocide occurring in the
Darfur Darfur ( ; ar, دار فور, Dār Fūr, lit=Realm of the Fur) is a region of western Sudan. ''Dār'' is an Arabic word meaning "home f – the region was named Dardaju ( ar, دار داجو, Dār Dājū, links=no) while ruled by the Daju, ...
region of the Sudan. Support from the US government followed with the Sudan Accountability and Divestment Act of 2007. More recently, some social investors have sought to address the rights of indigenous peoples around the world who are affected by the business practices of various companies. The 2007,
SRI in the Rockies Conference The SRI Conference is the annual national conference of the sustainable and responsible investing (SRI) industry. The conference was founded in 1990 by George R. Gay, and has grown from 45 to over 1,200 participants. Attendees include investment ...
held a special pre-conference specifically to address the concerns of indigenous peoples. Healthy working conditions, fair wages, product safety, and
equal opportunity employment Equal employment opportunity is equal opportunity to attain or maintain employment in a company, organization, or other institution. Examples of legislation to foster it or to protect it from eroding include the U.S. Equal Employment Opportunity ...
also remain headline concerns for many social investors. In the mid-2010s, some funds developed gender lens investing strategies to promote workplace equity and general welfare of women and girls.


Current strategies

Socially responsible investing is a growing market in both the US and Europe. In particular, it has become an important principle guiding the investment strategies of various funds and accounts.


Government-controlled funds

Government-controlled funds such as
pension funds A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides retirement income. Pension funds typically have large amounts of money to invest and are the major investors in listed and priva ...
are often very large players in the investment field, and are being pressured by the citizenry and by activist groups to adopt investment policies which encourage ethical corporate behavior, respect the rights of workers, consider environmental concerns, and avoid violations of human rights. One outstanding endorsement of such policies is
The Government Pension Fund of Norway The Government Pension Fund of Norway ( no, Statens pensjonsfond) comprises two entirely separate sovereign wealth funds owned by the government of Norway. The Government Pension Fund Global, also known as the Oil Fund, was established in 1990 t ...
, which is mandated to avoid "investments which constitute an unacceptable risk that the Fund may contribute to unethical acts or omissions, such as violations of fundamental humanitarian principles, serious violations of human rights, gross corruption or severe environmental damages". In the 2000s and 2010s, pension funds were under pressure to disinvest from the arms company
BAE Systems BAE Systems plc (BAE) is a British multinational arms, security, and aerospace company based in London, England. It is the largest defence contractor in Europe, and ranked the seventh-largest in the world based on applicable 2021 revenues. ...
, partially due to a campaign run by the
Campaign Against Arms Trade Campaign Against Arms Trade (CAAT) is a UK-based campaigning organisation working towards the abolition of the international arms trade. It was founded in 1974 by a coalition of peace groups. It has been involved in several high-profile campaig ...
(CAAT).
Liverpool City Council Liverpool City Council is the governing body for the city of Liverpool in Merseyside, England. It consists of 90 councillors, three for each of the city's 30 wards. The council is currently controlled by the Labour Party and is led by Mayor ...
has passed a successful resolution to disinvest from the company, but a similar attempt by the
Scottish Green Party The Scottish Greens (also known as the Scottish Green Party; gd, Pàrtaidh Uaine na h-Alba ; sco, Scots Green Pairtie) are a green political party in Scotland. The party has seven MSPs in the Scottish Parliament as of May 2021. As of the 20 ...
in
Edinburgh City Council The City of Edinburgh Council is the Local government in Scotland, local government authority for the city of Edinburgh, capital of Scotland. With a population of in mid-2019, it is Subdivisions of Scotland#Council areas, the second most populo ...
was blocked by the Liberal Democrats.


Mutual funds and ETFs

Socially responsible mutual funds counted by the 2014 Trends Report increased in number to 415 in 2014, up from 333 in 2012, 250 in 2010, 173 in 2005 & 2007, 189 in 2003, and 167 in 2001. The overall number of mutual funds incorporating
environmental, social and corporate governance ESG (environmental, social, and corporate governance) data reflect the negative externalities (costs to others) caused by an organization with respect to the environment, to society and to corporate governance. ESG data can be used by investor ...
(ESG) has increased four-fold since 2012. Additionally, 20 exchange-traded funds (ETFs) that incorporate ESG criteria were identified with $3.5 billion in assets at the end of 2011, an increase from the 8 ETFs with $2.25 billion in net assets identified in its 2007 report—the first Trends report to track ETFs 1 Unlike the Employee Retirement Income Security Act of 1974 (ERISA), which severely limits the extent to which socially responsible goals can be considered in managing corporate and Taft-Hartley pension assets (due to ERISA's overriding goal of protecting employees' pensions),Lemke and Lins, ''ERISA for Money Managers'' §§2:122 – 2:124 (Thomson West, 2014). registered investment companies can take these factors into account so long as the disclosure and other requirements of the Investment Company Act of 1940 are met.
US SIF US SIF: The Forum for Sustainable and Responsible Investment is a United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily lo ...
maintains charts describing the socially responsible mutual funds offered by its member firms. :''Key: X = No investment; P = Positive investment; R = Restricted investment; NS = No screens.''


Separately managed accounts

According to the 2014 Report on US Sustainable, Responsible and Impact Investing Trends, among separate account managers, 214 distinctive separate account vehicles or strategies, with $433 billion in assets, incorporated ESG factors into investment analysis. Where a separate account is subject to ERISA, there are legal limitations on the extent to which investment decisions can be based on factors other than maximizing plan participants' economic returns.


Shareholder advocacy

Shareholder resolutions are filed by a wide variety of institutional investors, including public pension funds, faith-based investors, socially responsible mutual funds, and labor unions. In 2004, faith-based organizations filed 129 resolutions, while socially responsible funds filed 56 resolutions. Regulations governing shareholder resolutions vary from country to country. In the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, they are determined primarily by the
Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
, which regulates mutual funds and applies the 1940 Act and by the Department of Labor, which regulates certain plans and applies ERISA. These regulatory regimes require pension plans and
mutual funds A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV i ...
to disclose how they voted on behalf of their investors. U.S. shareholders have organized various groups to facilitate jointly filing resolutions. These include the
Council of Institutional Investors Council of Institutional Investors is a nonprofit, nonpartisan association of U.S. pension funds and other employee benefit funds, foundations and endowments that "promotes the interests of institutional investors in the United States". It descr ...
, the
Interfaith Center on Corporate Responsibility The Interfaith Center on Corporate Responsibility (ICCR) is an association advocating for corporate social responsibility. Its 300 member organizations comprise faith communities, asset managers, unions, pensions, NGOs and other investors. ICCR memb ...
, and the
US SIF US SIF: The Forum for Sustainable and Responsible Investment is a United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily lo ...
. From 2012 to 2014, more than 200 US institutions and investment management firms filed or co-filed proposals. These institutions and money managers collectively controlled $1.72 trillion in assets at the end of 2013. The top categories of environmental and social issues from 2012 to 2014 were political contributions and climate change and environmental issues.


Community investing

Community investing, a subset of socially responsible investing, allows for investment directly into community-based organizations. Community investing institutions use investor capital to finance or guarantee loans to individuals and organizations that have historically been denied access to capital by traditional financial institutions. These loans are used for housing, small business creation, and education or personal development in the US and UK, or are made available to local financial institutions abroad to finance international community development. The community investing institution typically provides training and other types of support and expertise to ensure the success of the loan and its returns for investors. Community investing grew almost 5% from 2012 to 2014. Assets held and invested locally by
community development financial institution A community development financial institution (US) or community development finance institution (UK) - abbreviated in both cases to CDFI - is a financial institution that provides credit and financial services to underserved markets and populations, ...
s (CDFIs) based in the US totaled $64.3 billion at the start of 2014, up from $61.4 billion in 2012.


Investing strategies


Investing in capital markets

Social investors use several strategies to maximize financial return and attempt to maximize social good. These strategies seek to create change by shifting the cost of capital down for sustainable firms and up for the non-sustainable ones. The proponents argue that access to capital is what drives the future direction of development. A growing number of rating agencies collects both raw data the ESG behaviour of firms as well as aggregates this data in indices. After several years of growth the rating agency industry has recently been subject to a consolidation phase that has reduced the number of genesis through mergers and acquisitions.


ESG integration

ESG integration is one of the most common responsible investment strategies and entails the incorporation of environmental, social and governance ("ESG") criteria into the fundamental analysis of equity investments. According to the non-profit Investor Responsibility Research Center institute (IRRCi), approaches to ESG integration vary greatly among asset managers depending on: * Management: Who is responsible for ESG integration within the organization? * Research: What ESG criteria and factors are being considered in the analysis? * Application: How are the ESG criteria being applied in practice?


Negative screening

Negative screening excludes certain securities from investment consideration based on social or environmental criteria. For example, many socially responsible investors screen out tobacco company investments. The longest-running SRI index, the Domini 400—now the
MSCI KLD 400 The MSCI KLD 400 Social Index was launched in 1990 and is designed to help Socially responsible investing, socially conscious investors weigh social and environmental factors in their Traditional investments, investment choices. It was founded by KL ...
—was started in May 1990. It has continued to perform competitively —with average annualized total returns of 9.51% through December 2009 compared with 8.66% for the S&P 500. Despite this impressive growth, it has long been commonly perceived that SRI brings smaller returns than unrestricted investing. So-called "sin stocks", including purveyors of tobacco, alcohol, gambling and defense contractors, were banned from portfolios on moral or ethical grounds. And shutting out entire industries hurts performance, the critics said. However, in a comprehensive study, financial economists Lobe, Roithmeier, and Walkshäusl taking the position of the '' advocatus diaboli'', answer the question whether to invest in a socially responsible way – or not? They create a set of global and domestic sin indexes consisting of 755 publicly traded socially irresponsible stocks around the world belonging to the Sextet of Sin: adult entertainment, alcohol, gambling, nuclear power, tobacco, and weapons. They compare their stock market performance directly with a set of virtue comparables consisting of the most important international socially responsible investment indexes. They find no compelling evidence that ethical and unethical screens lead to a significant difference in their financial performance, which is in contrast with the results of prior studies on sinful investing.


Divestment

Divesting In finance and economics, divestment or divestiture is the reduction of some kind of asset for financial, ethical, or political objectives or sale of an existing business by a firm. A divestment is the opposite of an investment. Divestiture is ...
is the act of removing stocks from a portfolio based on mainly ethical, non-financial objections to certain business activities of a corporation. Recently, CalSTRS (California State Teachers' Retirement System) announced the removal of more than $237 million in tobacco holdings from its investment portfolio after six months of financial analysis and deliberations.


Shareholder activism

Shareholder activism A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal owner ...
efforts attempt to positively influence corporate behavior. These efforts include initiating conversations with corporate management on issues of concern, and submitting and voting proxy resolutions. These activities are undertaken with the belief that social investors, working cooperatively, can steer management on a course that will improve financial performance over time and enhance the well being of the stockholders, customers, employees, vendors, and communities. Recent movements have also been reported of "investor relations activism", in which investor relations firms assist groups of shareholder activists in an organized push for change within a corporation. This is done typically by leveraging their enhanced knowledge of the corporation, its management (often via direct relationships), and the securities laws as a whole. Hedge funds are also major activist investors; while some pursue socially responsible investing goals, many simply are seeking to maximize fund returns. Pension plans subject to ERISA are somewhat more constrained in their ability to engage in shareholder activism or the use of plan assets to promote public policy positions; any expenditure of plan assets must be aimed at enhancing participants' retirement income.


Shareholder engagement

A less vocal subtype of
shareholder activism A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal owner ...
, shareholder engagement requires extensive monitoring of the non-financial performance of all portfolio companies. In shareholder engagement dialogues, investees receive constructive feedback on how to improve ESG issues within their sphere of influence.


Positive investing

Positive investing is the new generation of socially responsible investing. It involves making investments in activities and companies believed to have a positive social impact. Positive investing suggested a broad revamping of the industry's methodology for driving change through investments. This investment approach allows investors to positively express their values on
corporate behavior Corporate behaviour is the actions of a company or group who are acting as a single body. It defines the company's ethical strategies and describes the image of the company. Role Not only does corporate behaviour play various roles within differe ...
issues such as
social justice Social justice is justice in terms of the distribution of wealth, opportunities, and privileges within a society. In Western and Asian cultures, the concept of social justice has often referred to the process of ensuring that individuals fu ...
and the environment through stock selectionwithout sacrificing
portfolio diversification In finance, diversification is the process of allocating capital in a way that reduces the exposure to any one particular asset or risk. A common path towards diversification is to reduce risk or volatility by investing in a variety of assets. I ...
or long-term performance. Positive screening pushes the idea of
sustainability Specific definitions of sustainability are difficult to agree on and have varied in the literature and over time. The concept of sustainability can be used to guide decisions at the global, national, and individual levels (e.g. sustainable livi ...
, not just in the narrow
environmental A biophysical environment is a biotic and abiotic surrounding of an organism or population, and consequently includes the factors that have an influence in their survival, development, and evolution. A biophysical environment can vary in scale f ...
or
humanitarian Humanitarianism is an active belief in the value of human life, whereby humans practice benevolent treatment and provide assistance to other humans to reduce suffering and improve the conditions of humanity for moral, altruistic, and emotional ...
sense, but also in the sense of a company's long-term potential to compete and succeed. In 2015,
Morgan Stanley Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
conducted a review of 10,000 funds and concluded "strong sustainability" investments outperformed weak sustainability investments, tackling the idea of a trade-off between positive impact and financial return. while the Global Impact Investing Network's 2015 report on benchmarks and returns in impact investing in private equity and venture capital found market-rate or market-beating returns were common in impact investments.


Impact investing

Impact investing Impact investing refers to investing, investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is ...
is the alternative investment (i.e. private equity) approach to Positive investing. In 2014, the UK's presidency of the G8 created a Social Impact Investment Task Force which produced a series of reports that defined impact investing as "those that intentionally target specific social objectives along with a financial return and measure the achievement of both".G8 Social Impact Investment Task Force
Investing for Social and Environmental Impact
January 2009.
Impact investing, capitalizes businesses that potentially provide social or environmental impact at a scale that purely philanthropic interventions usually cannot reach.Monitor Institute
Impact Investment, the Invisible Heart of Markets
September 2014.
This capital may be in a range of forms including private equity, debt, working capital lines of credit, and loan guarantees. Examples in recent decades include many investments in
microfinance Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...
, community development finance, and clean technology. Impacting investing has its roots in the
venture capital Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which ha ...
community, and an investor will often take active role mentoring or leading the growth of the company or start-up.


Community investment

By investing ''directly'' in an institution, rather than purchasing stock, an investor is able to create a greater social impact: money spent purchasing stock in the secondary market accrues to the stock's previous owner and may not generate social good, while money invested in a community institution is put to work. For example, money invested in a
Community Development Financial Institution A community development financial institution (US) or community development finance institution (UK) - abbreviated in both cases to CDFI - is a financial institution that provides credit and financial services to underserved markets and populations, ...
may be used by that institution to alleviate poverty or inequality, spread access to capital to under-served communities, support economic development or green business, or create other social good. In 1984, Trillium Asset Management's founder, Joan Bavaria, invited
Chuck Matthei Chuck is a masculine given name or a nickname for Charles or Charlie. It may refer to: People Arts and entertainment * Chuck Alaimo, American saxophonist, leader of the Chuck Alaimo Quartet * Chuck Barris (1929–2017), American TV producer * C ...
of the Institute for Community Economics (ICE), an organization that helps communities create and sustain land trusts, to a meeting of
US SIF US SIF: The Forum for Sustainable and Responsible Investment is a United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily lo ...
. It is likely that this was the first time a nonprofit organization with a loan fund would meet directly with SRI managers. Trillium clients began investing in ICE later that year.


Global context

Socially responsible investing is a global phenomenon. With the international scope of business itself, social investors frequently invest in companies with international operations. As international investment products and opportunities have expanded, so have international SRI products. The ranks of social investors are growing throughout developed and developing countries. In 2006, the
United Nations Environment Programme The United Nations Environment Programme (UNEP) is responsible for coordinating responses to environmental issues within the United Nations system. It was established by Maurice Strong, its first director, after the United Nations Conference on th ...
launched its
Principles for Responsible Investment Principles for Responsible Investment (UNPRI or PRI) is a United Nations-supported international network of financial institutions working together to implement its six aspirational principles, often referenced as "the Principles". Its goal is to u ...
which provide a framework for investors to incorporate environmental, social, and governance (ESG) factors into the investment process. PRI has more than 1,500 signatories managing more than US$60 trillion of assets. Th
Global Sustainable Investment Alliance
(GSIA) is a collaboration of membership-based sustainable investment organisations around the world including th
European Sustainable Investment Forum
(Eurosif)
UK Sustainable Investment and Finance Association
( UKSIF), th
Responsible Investment Association Australasia
(RIAA)
Responsible Investment Association
(RIA Canada), th
Forum for Sustainable and Responsible Investment
(
US SIF US SIF: The Forum for Sustainable and Responsible Investment is a United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily lo ...
)
Dutch Association of Investors for Sustainable Development
(VBDO) an
Japan Sustainable Investment Forum
The GSIA’s mission is to deepen the impact and visibility of sustainable investment organizations at the global level. The
Global Sustainable Investment Review 2018
', the fourth edition of this biennial report, continues to be the only report collating results from the market studies of regional sustainable investment forums from Europe, the United States, Japan, Canada, and Australia and New Zealand. It provides a snapshot of sustainable investing in these markets at the start of 2018 by drawing on the in-depth regional and national reports from GSIA members: Eurosif, Japan Sustainable Investment Forum (JSIF), Responsible Investment Association Australasia, RIA Canada and US SIF. This report also includes data on the African sustainable investing market, from the African Investing for Impact Barometer, and on Latin America from the Principles for Responsible Investment. The 2018 report shows that globally, sustainable investing assets in the five major markets stood at US$30.7 trillion at the start of 2018, a 34% increase in two years. From 2016 to 2018, the fastest growing region has been Japan, followed by Australia/New Zealand and Canada. These were also the three fastest growing regions in the previous two-year period. The largest three regions— based on the value of their sustainable investing assets—were Europe, the United States and Japan. An 2020 global analysis from Morningstar indicates that assets in sustainable funds reached nearly, $1.7 trillion. Net flows into U.S. sustainable funds surpassed $51 billion.


ESG ratings agencies

Asset managers and other financial institutions increasingly rely on ESG ratings agencies to assess, measure and compare companies' ESG performance. Sustainsalytics,
RepRisk RepRisk AG is an environmental, social, and corporate governance (ESG) data science company based in Zurich, Switzerland, specializing in ESG and business-conduct risk research, and quantitative solutions. The company runs an online due-dili ...
are two examples of dedicated ESG ratings agencies, while global credit agencies like
S&P Global S&P Global Inc. (prior to April 2016 McGraw Hill Financial, Inc., and prior to 2013 The McGraw–Hill Companies, Inc.) is an American Public company, publicly traded corporation headquartered in Manhattan, New York City. Its primary areas of busi ...
are also seeing the value to adding ESG ratings to their data offerings.


Responsible, ethical and impact investing in Australia

According to the Responsible Investment Association Australasia's annua
Responsible Investment Benchmark Report Australia 2020
in 2019 and for a 19th consecutive year, funds managed under responsible investment approaches grew as a proportion of total professionally managed investments in Australia to AU$1,149 billion in assets under management, a rise of 17% from 2018. Ever more investment managers are applying a range of responsible investing approaches – from ESG integration and negative screening to sustainability-themed and impact investing. The report shows that in Australian and multi-sector responsible investment funds outperformed mainstream funds over 1, 3, 5 and 10 year time horizons. Australian responsible investment managers still favour ESG integration and corporate engagement and voting above negative and norms-based screening as their primary responsible investment approaches for constructing portfolios, but managers are increasingly driving capital towards sustainability-themed and impact investing allocations with allocations to Green, Social and Sustainability Bonds more than doubling since last year. Negative screening of fossil fuels by the responsible investment industry is beginning to catch up to consumer interest. In 2018, only 5% of responsible investment AUM for survey respondents who conduct negative screening was screened for fossil fuels. In 2019, 19% of responsible investment AUM has been screened for fossil fuels, growing 14 percentage points from the year before. For consumers using RIAA'
Responsible Returns
search and compare tool for ethical investments, the most important exclusionary screens are fossil fuels, human rights abuses and armaments.


Responsible, ethical and impact investing in New Zealand

The Responsible Investment Association Australasia's annua
Responsible Investment Benchmark Report New Zealand 2020
details the size, growth, depth and performance of the New Zealand responsible investment market over 12 months to 31 December 2019 and compares these results with the broader New Zealand financial market. In 2019, funds managed under responsible investment approaches grew as a proportion of total professionally managed investments in New Zealand to NZ$153.5 billion in 2019. This represents 52% of the estimated NZ$296 billion of total professionally managed assets under management in New Zealand. Increasingly, responsible investors in New Zealand have shifted their focus from screening out harmful industries such as tobacco and armaments, to considering broader environmental, social and corporate governance (ESG) factors when investing. Impact investing has grown over 13 times from NZ$358 million in 2018 to NZ$4.74 billion in 2019. Green, Social and Sustainability (GSS) Bonds account for 88% of products using this approach.


Ethical investment in the UK

In 1985, Friends Provident launched the first ethically screened investment fund with criteria which excluded tobacco, arms, alcohol and oppressive regimes. Since 1985, over 90 investment funds have launched offering a wide range of investment criteria; both negatively screened and with positive investment criteria i.e. investing into companies involved in promoting sustainability. Since 1985, most of the major investment organizations have launched ethical and socially responsible funds, although this has led to a great deal of discussion and debate over the use of the term "ethical" investment. This is because each of the fund management organizations tend to apply a slightly different approach to running their funds. In recent years there has been growth in the market for high social impact investments; this is a style of investing where the businesses receiving investment have social or environmental goals as a primary purpose. UK institutions are also getting more involved in social investing through impact investing funds, with those such as
Deutsche Bank Deutsche Bank AG (), sometimes referred to simply as Deutsche, is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Sto ...
and
NESTA Nesta (formerly NESTA, National Endowment for Science, Technology and the Arts) is an innovation foundation based in the UK. The organisation acts through a combination of programmes, investment, policy and research, and the formation of part ...
, alongside other institutions such as Big Issue Invest, which is part of
The Big Issue ''The Big Issue'' is a street newspaper founded by John Bird and Gordon Roddick in September 1991 and published in four continents. ''The Big Issue'' is one of the UK's leading social businesses and exists to offer homeless people, or individ ...
group. As of June 2014, EIRIS estimated that there was over £13.5 billion invested in Britain's green and ethical retail funds. This estimate is based on around 85 UK domiciled green or ethical retail funds and it seeks to not include UK money invested in ethical funds domiciled outside of the UK.


In higher education

In 2007, the Dwight Hall organization at
Yale University Yale University is a private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the third-oldest institution of higher education in the United States and among the most prestigious in the wo ...
launched the first undergraduate-run socially responsible investment fund in the United States, known as the Dwight Hall Socially Responsible Investment Fund.


Comparison with conventional investing

While conventional investing only focuses on the traditional risk and returns considerations in making investment decisions, socially responsible investing considers other ethical factors as discussed above. Hence, the question often arise as to whether it pays financially to be ethical or not in making investment decisions. The debate as to whether there is anything to gain or lose by deciding to be ethical and socially responsible in making investment decisions is still ongoing. Several studies have found that there is no conclusive evidence as to whether the performances of socially responsible investments outperform those of conventional and vice versa.


Comparing portfolio and fund performance

Several studies in various places have analysed the performance of socially responsible investing (SRI) and conventional investing (CI) using different models and methodologies for measuring performance. Using the
Carhart four-factor model In portfolio management, the Carhart four-factor model is an extra factor addition in the Fama–French three-factor model, proposed by Mark Carhart. The Fama-French model, developed in the 1990, argued most stock market returns are explained ...
, found that an approach where stocks with high SRI scores are bought while those with low SRI scores are sold off produced a positive abnormal performance of up to 8.7% per annum, suggesting that investors can achieve their ethical goals without hurting their financial performance. also using the Carhart four-factor model, noted an excess return of 7% for environmentally-friendly firms. However, using a similar approach found the performance of SRI stocks to be not statistically different from those of conventional stocks. In contrast, also using the Carhart four-factor model found a
portfolio Portfolio may refer to: Objects * Portfolio (briefcase), a type of briefcase Collections * Portfolio (finance), a collection of assets held by an institution or a private individual * Artist's portfolio, a sample of an artist's work or a ...
which included "sin stocks" (alcohol, tobacco, gaming) to be significantly outperforming similar comparable stocks, which indicates that investors in SRI stocks might be losing. However, after controlling for managerial skills, transaction costs and fees, found no outperformance between portfolios which include "sin" stocks and comparable SR portfolios. Some other studies have compared the performance of SRI funds with conventional
funds Funding is the act of providing resources to finance a need, program, or project. While this is usually in the form of money, it can also take the form of effort or time from an organization or company. Generally, this word is used when a firm uses ...
. While some studies used only the capital asset pricing model to compare performance), others used multifactor models such as the Fama–French three-factor model and Carhart four-factor model. These studies found no statistically significant difference in performance between the SRI and conventional funds.


Comparing stock market index performance

Considering that difference in performance of funds may be due to portfolio selection/construction process and/or the ability of fund managers and not necessarily on the nature of investments themselves, some studies have compared the performance of
stock market indices In finance, a stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current stock price levels with past prices to calculate market performance. Two of the ...
instead. Two of the pioneer studies compared the performance of the Domini 400 Social Index with the
S&P 500 The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of D ...
. The
Sharpe ratio In finance, the Sharpe ratio (also known as the Sharpe index, the Sharpe measure, and the reward-to-variability ratio) measures the performance of an investment such as a security or portfolio compared to a risk-free asset, after adjusting for its ...
and the capital asset pricing model were used to estimate Jensen's alpha for the comparison and no significant difference was found in the performance of the two indices. A follow-up study compared the performance of four SRI indices (Domini 400 Social Index,
Calvert Social Index The Calvert Social Index is a stock market index created by Calvert Investments as a benchmark of large companies that are considered socially responsible or ethical. It currently consists of 680 companies, weighted by market capitalization, select ...
, Citizen's Index and
Dow Jones Sustainability Indices The Dow Jones Sustainability Indices (DJSI) launched in 1999, are a family of indices evaluating the sustainability performance of thousands of companies trading publicly, operated under a strategic partnership between S&P Dow Jones Indices and Ro ...
US Index) with the
S&P 500 The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of D ...
index between 1990 and 2004 and found that returns on the SRI indices exceeded returns on S&P 500 even though they were not statistically significant.Statman, M. (2006). “Socially responsible indexes: composition, performance, and tracking error.” Journal of Portfolio Management 32, 100-109. Others focused only on the US and on outside the US by studying the performance of 29 SRI indices globally. Using the capital asset pricing model to estimate Jensen's alpha as the performance indicator, no significant evidence of under/over performance was found. A comparison of the performance of SR indices with conventional indices on a global scale using marginal conditional stochastic dominance found there is "strong evidence that there is a financial price to be paid for socially responsible investing." A more recent study showed that "improvements in CSR reputation enhance profits".


See also

* Blended value *
Business ethics Business ethics (also known as Corporate Ethics) is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business co ...
*
Community wind energy Community wind projects are locally owned by farmers, investors, businesses, schools, utilities, or other public or private entities who utilize wind energy to support and reduce energy costs to the local community. The key feature is that local c ...
*
Corporate social responsibility Corporate social responsibility (CSR) is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethicall ...
* Climate-related asset stranding *
Development impact bond Development Impact Bonds (DIBs) are a performance-based investment instrument intended to finance development programmes in low resource countries, which are built off the model of social impact bond (SIB) model. In general, the model works the same ...
*
Disinvestment Disinvestment refers to the use of a concerted economic boycott to pressure a government, industry, or company towards a change in policy, or in the case of governments, even regime change. The term was first used in the 1980s, most commonly in ...
*
Eco-investing Eco-investing or green investing, is a form of socially responsible investing where investments are made in companies that support or provide environmentally friendly products and practices. These companies encourage (and often profit from) new t ...
*
Environmental, social and corporate governance ESG (environmental, social, and corporate governance) data reflect the negative externalities (costs to others) caused by an organization with respect to the environment, to society and to corporate governance. ESG data can be used by investor ...
*
Ethical banking An ethical bank, also known as a social, alternative, civic, or sustainable bank, is a bank concerned with the social and environmental impacts of its investments and loans. The ethical banking movement includes: ethical investment, impact inves ...
*
Fossil fuel divestment Fossil fuel divestment or fossil fuel divestment and investment in climate solutions is an attempt to reduce climate change by exerting social, political, and economic pressure for the institutional divestment of assets including stocks, bonds ...
*
Integrated reporting Integrated reporting (IR, or in International Integrated Reporting Council publications) in corporate communication is a "process that results in communication, most visibly a periodic “integrated report”, about value creation over time. A ...
*
Impact investing Impact investing refers to investing, investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is ...
*
Microfinance Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...
*
Philanthrocapitalism Philanthrocapitalism or philanthropic capitalism is a way of doing philanthropy, which mirrors the way that business is done in the for-profit world. It may involve venture philanthropy that actively invests in social programs to pursue specific p ...
*
Sharia investments Banking or banking activity that complies with Sharia (Islamic law)—known as Islamic banking and finance, or Sharia-compliant finance—has its own products, services and contracts that differ from conventional banking. Some of these include '' ...
*
Social finance Social finance is a category of financial services which aims to leverage private capital to address challenges in areas of social and environmental need. Having gained popularity in the aftermath of the 2008 Global Financial Crisis, it is notable f ...
*
Social impact bond A social impact bond, also known as pay-for-success financing, pay-for-success bond, social benefit bond or simply a social bond, is one form of outcomes-based contracting. Although there is no single agreed definition of social impact bonds, mo ...
*
Social responsibility Social responsibility is an ethical framework in which an individual is obligated to work and cooperate with other individuals and organizations for the benefit of the community that will inherit the world that individual leaves behind. Social ...
*
Sustainable development Sustainable development is an organizing principle for meeting human development goals while also sustaining the ability of natural systems to provide the natural resources and ecosystem services on which the economy and society depend. The des ...
*
Sustainable finance Sustainable finance is the set of financial regulations, standards, norms and products that pursue an environmental objective. It allows the financial system to connect with the economy and its populations by financing its agents while maintaining a ...
* Terror-free investing *
Vice Fund The Vice Fund (MUTF: VICEX), formerly the Barrier Fund, is a mutual fund investing in companies that have significant involvement in, or derive a substantial portion of their revenues from the tobacco, gambling, defense/aerospace, and alcohol indus ...


References


External links


UN Principles for Responsible InvestmentMoskowitz Prize -Quantitative Research in the field of Socially Responsible Investing
* Socially Responsible Investing at Appropedia
Socially Responsible Investing Basics from the Forum for Sustainable and Responsible Investment
* The World Bank (2010)
Water and Climate Change: Understanding the Risks and Making Climate-Smart Investment Decisions

Invest with Values
– The Investor's Gateway to Socially Responsible Investing resources, topics and organizations {{DEFAULTSORT:Socially Responsible Investing Corporate social responsibility Economy and the environment Investment management Social finance