Socially responsible investment
Socially Responsible Investment (SRI) is a method of investment that combines the investors’ traditional financial objective with a commitment to social and environmental responsibility. It has evolved from primarily involving negative screening (i.e. avoiding investments in tobacco, gambling, and armaments) to positive screening, using social and environmental criteria, to identify best-in-class companies.
SRI's rapid growth
In recent years, SRI has been the fastest growing area of equity investment. While the development of SRI has been most significant in the U.S. and Europe, the SRI sector is also rapidly developing in other parts of the world.
There is no single explanation for why SRI has experienced such impressive growth. Scandals like Enron and WorldCom have created a need for corporate openness and transparency (socially responsible corporations are seen as being better at managing risks and opportunities in the long-term), and consumers are increasingly aware of corporations' ethical behaviour. These are just a few of the contributing factors.
