What is "socially responsible investing" (SRI)?

Socially responsible investing (SRI) is an investment strategy that takes into account both financial returns and the broader social or environmental impact of the investments. This means that when investors engage in SRI, they are not only looking for financial gains but are also actively seeking to support companies and initiatives that align with particular ethical values or contribute positively to society and the environment.

This approach can include investing in companies that demonstrate sustainable business practices, prioritizing social equity, or fostering environmental stewardship. By integrating these ethical considerations, socially responsible investors aim to achieve a dual objective of making money while also promoting a positive social change.

This is distinct from strategies that focus solely on financial returns or that ignore ethical implications entirely, which is not the goal of SRI. The approach recognizes that long-term financial performance can be enhanced by sustainable practices, highlighting the interconnected nature of financial markets and societal impact.