Socially responsible impact investing (SRI) was born out of the idea that the way we spend and invest our money has consequences—both good and bad. Today, SRI investors are weighing financial performance alongside social and environmental factors, choosing investment opportunities that align with their values without sacrificing performance. For many, that means directing investment capital into responsible, transparent businesses, organizations and funds that can deliver a measurable financial, social and environmental return.
The US SIF Foundation’s 2016 biennial report on the scope of sustainable, responsible and impact investing in the United States found:
SRI investors are often motivated to invest in businesses and organizations that advance social, environmental and governance (ESG) practices. Some specific issues of concern to SRI investors include:
Screening refers to the practice of selecting companies for investment using social and environmental criteria. Negative screening excludes investing in companies that are engaging in business practices that are not socially responsible. Positive screening selects companies for investment based on their commitment and adherence to socially responsible business practices.
Owning shares in a company gives investors a defined path for advocacy, activism and engagement around the issues they care about. Shareholders may file or co-file Shareholder or Proxy Resolutions that serve the purpose of bringing important issues to the attention of company management. This process can affect change at the institutional level, prompting dialogue and agreements between the filers and company management.
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