OVERVIEW OF

SOCIALLY
RESPONSIBLE
INVESTING
What is Socially Responsible
Investment (SRI)?
• Socially Responsible Investment, or SRI, is a strategy that
considers not only the financial returns from an investment but
also its impact on environmental, ethical or social change.
• Socially Responsible Investment can be made into
individual companies with good social value, or through
socially conscious mutual fund or exchange-traded fund
(ETF).
• Socially Responsible Investment tend to mimic the political
and social climate of time. license
Ways to Make Socially Responsible
Investments
• An SRI encompasses many other types of investments, the
similarity between them being that they have a positive social
impact. To be specific, investors looking to make such
investments focus on three key aspects – environmental,
social, and corporate governance (ESG). Investors use the
three factors to assess the sustainability or social impact of an
investment.
> ESG is a framework that helps stakeholders understand
how an organization is managing risks and opportunities
related to environmental, social, and governance criteria.
 Environmental  Governance

The environmental impacts Corporate

and risk management procedures of Governance refers to how an
an organization are referred to as organization is led and managed.
environmental factors.
 Social

The social pillar refers to an

organization’s relationships with
stakeholders.
A hallmark of ESG is how
social impact expectations have
extended outside the walls of the
company and to supply chain
partners, particularly those in
developing economies where
environmental and labor standards
may be less robust.
Various approaches to ensure that the
venture achieves its social goals

1. Negative Screening - As implied in the name, the

technique involves screening a company’s practices and
products and/or services before deciding to invest in it.
2. Positive Investing - an investor chooses to invest in
companies whose practices they approve of.
3. Community Investing - If an investor wants to try their
hand at SRI, community investing is one of the best
approaches. It entails putting money in projects that boost
local communities economically.
Types of Socially Responsible Investments

a. Mutual Funds and Exchange-Traded Funds (ETFs) -

Mutual funds and ETFs offer investors pooled investment
product options.
b. Community Investments - An investor can also put their
money directly into projects that benefit communities. An
easy way to make such an investment is to contribute to
community development financial institutions (CDFIs).
c. Microfinance - Another way individuals can make socially-
sound investments is by offering microloans or small
loans to startups.
CONCLUSION
Socially responsible investment (SRI) is an investment that
achieves financial gain and social/ environmental goals. An
strategy that allows investors to align their financial goals with
their values an promote positive social and environmental
impact. SRI is based on the ESG criteria and can be
implemented through various types SRI.