What Is SRI

 What is SRI: Socially Responsible Investment

Socially responsible investment (SRI) involves fund managers, bankers, insurers and financial advisers considering the ethical, social and environmental actions and performance of companies when selecting them for investment.

In addition, they are usually looking at their own business models to ensure that their own firm is acting responsibly.

Pooled Investment: Collective Ethical Investment

As investors, we generally pool our money with many other investors, this is known as collective investment.  We then engage a fund manager, normally it is our pension fund or investment fund or insurance company, to manage this money for us with specific e.g.  Ethical objectives.

Fund Manager Approaches:

There are broadly three approaches as defined by EIRIS (Ethical Investment Research Services) to companies managing and delivering SRI financial products for investors:

• Screening - broadly having a selection of areas e.g.  fur trade, that are unacceptable and excluded
• Preference - where for example, the fund manager may need to invest in oil but it chooses the most ethical
• Engagement - where fund manager investors are actively encouraging companies that they invest in to become 'greener'

Screening is by far the most popular choice of delivering ethical investment choices for the public.

We help to understand what is SRI, so you have a better view.  If you would like to ask anything else on the issue contact us.