Socially-Responsible Investing

Socially-Responsible Investing (SRI) describes an investment strategy of funds owned by individuals or institution, which seeks to maximize both financial return and social good. It is also known as ethical, sustainable and green investing.

Socially-responsible investors when making investment decisions they consider environment, social and governance aspects (ESG - Environment, Social, Governance) and give preference to the companies that cherish such values as sustainable development, environmental protection, consumer rights protection, human rights or diversity.

Thus the essence of social responsible investing is the adoption of wider perspective by the investors during the selection of companies or financial products such as exchange indices or mutual funds through additional consideration of qualitative factors from the ESG category during analysis. By the same token the socially responsible investors encourage corporations indirectly to increase their commitment to such areas as environmental protection, corporate governance, society.

Pursuant to the report published by EuroSIF in September 2010, the level of socially responsible investing assets globally is currently at the level of approx. 7 trillion euros, of which almost 5 trillion euros is invested in Europe (above 70%). For the comparison sake, the value of SRI in 2008 was around 5 trillion euros, which implies almost 40 per cent increase over a span of 2 years. Most funds is invested via mutual funds, specialist funds and ETFs.

  Total SRI
Total SRI
(€ bn)
United States (2010) Total SRI US$ 3,069 US$ 3,069 2,141
Canada (2008) Core SRI Cnd$ 54.2 Cnd $ 609.2 405
Broad SRI Cnd$ 555.0
Australia / NZ (2010) Core SRI Au$ 18.2 Au $ 93 58
Broad SRI Au$ 74.8
Japan (2009)   ¥ 579 ¥ 579 4
Europe (2009) Core SRI € 1,150 € 4,986 4,986
Broad SRI € 3,836
źródło: Eurosif 2010 European SRI Study

Useful links:

Principles for Responsible Investment (UN)

EuroSIF (European Union)

Social Investment Forum (United States)

Association for Sustainable and Responsible Investment in Asia (Asia and Australia)