Posted 13.08.2020 in Investment Planning
Within the socially responsible investing (SRI) sector, there are a range of approaches employed by investment managers. However, they generally consider a company’s environmental, social and governance (ESG) credentials when researching, analysing, selecting and monitoring investments.
Socially responsible investing is sometimes known as sustainable, green or impact investing. You may also see the terms ethical investing, SRI and ESG used interchangeably.
Positive and negative screening
As part of the investment research, analysis and selection process, investment managers will screen each investment for its positive or negative attributes, or both. This means excluding companies or sectors that don’t meet the investors’ values.
This could include:
It means actively seeking companies with strong social, environmental or governance records.
This could include businesses that:
Investment managers will screen each investment for its positive or negative attributes – or both. While socially responsible investing is increasing in popularity, it’s not a new concept. From the 18th century on wards, many investors have been keen to align their wealth with their values.
Figure: Timeline of socially responsible investing – this is not a new concept.