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What is Socially Responsible Investing (SRI)
Socially responsible investing (SRI) is an investment strategy that considers both financial return and social or environmental impact. SRI investors may choose to invest in companies that are aligned with their values, such as companies that are committed to environmental sustainability, social justice, or corporate ethics. They may also choose to avoid investing in companies that engage in activities that they find harmful, such as companies that produce tobacco or weapons.
Implement a Socially Responsible Investing (SRI) strategy
There are many different ways to implement an SRI strategy. Some investors may choose to screen individual stocks or mutual funds based on their environmental, social, and governance (ESG) criteria. Others may invest in SRI-themed mutual funds or exchange-traded funds (ETFs).
SRI is becoming increasingly popular, as more and more investors are looking to align their investments with their values. According to a 2022 report by the Global Sustainable Investment Alliance, global sustainable investment assets reached $35.3 trillion in 2021, an increase of 29% from the previous year.
Benefits of Socially Responsible Investing (SRI)
Here are some of the benefits of SRI:
- Alignment with values: SRI allows investors to align their investments with their values. This can lead to a greater sense of satisfaction and fulfillment from investing.
- Positive impact: SRI can have a positive impact on the world by supporting companies that are working to improve the environment and society.
- Performance: SRI investments have historically performed on par with traditional investments. In fact, some studies have shown that SRI investments may even outperform traditional investments over the long term.
Steps | What to do to start Socially Responsible Investing (SRI)
If you are interested in SRI, there are a few things you should do to get started:
- Define your values: What are the issues that are most important to you? Once you know what your values are, you can start to identify companies that are aligned with them.
- Do your research: There are a number of resources available to help you research SRI investments. You can find information on individual stocks and mutual funds on websites such as Morningstar and Sustainalytics.
- Talk to a financial advisor: A financial advisor can help you develop an SRI investment strategy that is tailored to your individual needs and goals.
SRI is a great way to align your investments with your values and make a positive impact on the world.