What is SRI?

SRI stands for Socially Responsible Investment, also known in other terms such as, responsible investing, ESG investing, morally responsible investing, ethical investing, values-based investing, mission-investing, sustainable investing. It is a way of investing by taking ESG issues into consideration.

Environmental concerns regarding global warming, climate change, and pollution.
Carbon dioxide emitted by cars, factories and agricultural activities, as well as supply chain waste and production of harmful goods can all lead to environmental damage.

Social refers to the way in which business affects society. Issues include economic inequality, sweatshop labor, predatory lending, community contribution and equal trade.

Corporate governance is concerned with how a company makes decisions, how it is managed, and how it implements policies such as hiring practices, diversity policies and so on. One of the solutions to corporate governance issues is transparency, that is, a company should have a way for share holders and the public to examine its operations and decision-making in order to assure that the company is acting in a responsible manner.

According to Vigeo Rating, SRI comprises two major approaches with different underlying motivations and philosophies: Social Responsible Funds and Ethical Funds. Social responsible funds sees environmental, social and ‎governance risk mitigation as their priority towards screening target companies. Ethical funds exclude companies whose operation relate to  controversial sectors such as armament, gambling, tobacco and alcohol for example, from their investment pool.