UK Accounting Glossary
Ethical investing, also known as Socially Responsible Investment (SRI), is a practice of making investment decisions based on various moral, ethical, or religious principles.
Ethical investing is an alternative investment strategy undertaken by both individuals and institutions. Individual ethical investing is not guided by any specific code other than a personal value judgment. Intuitions, on the other hand, take a more pointed approach to ethical investing. Thus, for instance, a mutual fund committed to ethical investing may avoid companies that pursue unfair labour practices. Although there is a wide range of interpretations of how ethics relate to investing, funds engaged in ethical investing select their companies very carefully. In order to uphold ethical investing standards, socially responsible funds consider such issues as human rights, environment, weapon building, animal testing, etc.
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This glossary post was last updated: 9th February 2020.