The Growing Trend of Socially Responsible Investing (SRI)
Now more than ever people around the world are becoming more socially aware and becoming a socially responsible investor is not difficult, it’s a new trend that is showing lucrative returns over traditional investing in our changing economic climate.
Considered once a fairly radical strategy, Socially Responsible Investing is gaining increasingly more in popularity. A recent Morgan Stanley survey showed that 85% of individual investors are interested in sustainable investing. There are now more than 300 sustainable mutual funds and exchange traded funds up from 111 in 2014.
(SRI) is an investing strategy that strives to generate both ethical change and financial returns for an investor, often including companies making a positive sustainable or societal impact, like renewable energy companies and electric car manufacturers.
SRI tends can go by many names, including value-based investing, ethical investing and sustainable investing. The abbreviation “SRI” has come to stand for sustainable, responsible and impact investing. Some SRI practices use what is known as ESG investing which is a framework of environmental, social and governance factors used to guide the investing.
Investors interested in SRI do not select investments by typical metrics, performance, expenses and the like. They look at the companies revenue sources and business practices and make sure they align with there values. And since everyone’s values are different how investors define SRI varies from person to person. Some SRI investments will match your values while others do not.
What is worth taking note is that a do-good investment strategy in this day and age is performing just as well, if not better than standard. A 2020 research analysis from asset-management firm Arabesque Partners found that 80% of the reviewed studies demonstrated that sustainability practices have a positive influence on investment performance.
There have been doubts in the past about SRI, now there is a growing pool of evidence that shows the opposite, SRI is here to stay and at Broker Intros we are doing our part for SRI and over the next coming weeks, will bring to you short articles on this trend and where the smart money is being invested.