UK Accounting Glossary
Socially Responsible Investing (also known as SRI) requires funds to only invest in companies which meet certain moral or ethical criteria.
The idea behind socially responsible investing began in the 1920s when churches divested their holdings of gambling, alcohol and tobacco stocks. Today socially responsible investing is more sophisticated, allowing investors to not only avoid certain stock, but to actively seek stocks that meet their criteria of socially responsible investing. Over the years socially responsible investing has evolved into two major philosophies. Conservative socially responsible investing may seek to primarily to invest in stocks which support a specific religious view, while more liberal socially responsible investment managers seek stocks that support the environment, worker’s rights, or other social issues. Virtually all socially responsible investing funds avoid alcohol and tobacco stocks. As of 2005, socially responsible investing funds controlled $2.3 trillion investment dollars.
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This glossary post was last updated: 5th February 2020.