Thursday 20th October 2016                 Change text size:

Responsible investment terms: what is SRI?

Photo: Quinn Dombrowski via Flickr

Whether the businesses involved are in environment protection, human rights or clean energy, socially responsible investment (SRI) can provide the right balance between investors’ interests and the future prosperity of the planet.

It’s important to consider these three words individually, in order to understand the real meaning of what SRI is.

Socially means us. We are not a city or a nation anymore; we are the community of the planet, because today’s world is deeply interconnected. It means that the health and wealth of tomorrow’s generation need to be constructed today and together.

Responsible: because there is an urgent need for the future to be sustainable. The behaviour of every single person can still make the difference, but each action, from what we buy to where to invest our money, has to be made wisely and considerately.

Investment doesn’t mean just money. It means trust and values. Deciding to invest in tobacco or arms, rather than solar energy or fair trade goods, speaks volumes about who we are.

This is basically what socially responsible investment is: ensuring long-term solid financial return by being aware that no harm has been done to the planet and people. Instead, our actions have an additional sustainable value on society.

SRI provides both financial benefits and attention to worldwide communities because, quoting  the US Forum for Sustainable and Responsible Investment (US SIF),“Corporate responsibility and societal concerns are valid parts of investment decisions.”

In June 2012, responsible investment research firm EIRIS reported £11 billion was invested in UK green and ethical retail funds.

Meanwhile, The 2012 Report on Sustainable and Responsible Investing Trends in the United States by US SIF, found that $3.74 trillion out of $33.3 trillion of investment assets adhered to SRI strategies. This represented a 22% increase compared to the end of 2009.

The data shows that more and more investors are considering environmental and community issues when deciding where to direct their funds.

There is sufficient evidence to say that SRI is worth consideration. Not only does it guarantee solid long-term returns, but it’s also a moral imperative to guide tomorrow’s investments and educate unethical finance.

Further reading:

Impact investment to grow by £1bn in 2013

What kind of investor are you?

Eurosif study shows marked growth in responsible investment

Sustainable investment flourishes amongst European high net-worth individuals

The Guide to Sustainable Investment 2012 (NEIW edition)

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