Written by What is Socially Responsible Investing (SRI)?
- Definition: Socially responsible investing (SRI) involves choosing investments based on both financial returns and social or environmental impact.
- Focus: Investments that promote environmental sustainability, social justice, and ethical business practices.
- Criteria: SRI strategies typically use Environmental, Social, and Governance (ESG) criteria to screen potential investments.
Why Choose Socially Responsible Investing?
- Personal Alignment: SRI allows you to invest in alignment with your ethical values, such as supporting clean energy or fair labor practices.
- Long-Term Performance: Companies with high ESG scores are often better positioned for long-term sustainability and may outperform their peers.
- Positive Impact: Your investment decisions can have a direct impact on important global issues like climate change, human rights, and equality.
How to Get Started with SRI
- Research SRI Funds: Look for mutual funds, ETFs, or individual stocks that specifically focus on socially responsible investing.
- Assess ESG Ratings: Evaluate companies using ESG ratings and indexes like the MSCI ESG Leaders Index or the FTSE4Good Index.
- Understand Trade-offs: While ethical investing is important, it’s essential to balance impact with potential returns.
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