Sustainable Investing - Socially Responsible Investing (SRI) | Robeco Global (2024)

FAQs

What is the difference between SRI and ESG investing? ›

SRI is a type of investing that keeps in mind the environmental and social effects of investments, while ESG focuses on how environmental, social and corporate governance factors impact an investment's market performance.

Socially responsible investing (SRI) is an investing strategy that aims to generate both social change and financial returns for an investor. Socially responsible investments can include companies making a positive sustainable or social impact, such as a solar energy company, and exclude those making a negative impact.

Socially responsible investments—known as conscious capitalism—include eschewing investments in companies that produce or sell addictive substances or activities (like alcohol, gambling, and tobacco) in favor of seeking out companies that are engaged in social justice, environmental sustainability, and alternative ...

Socially responsible investing, or SRI, is an investing strategy that aims to help foster positive social and environmental outcomes while also generating positive returns.

It refers to a set of metrics used to measure an organization's environmental and social impact and has become increasingly important in investment decision-making over the years. But while the term ESG was first coined in 2004 by the United Nations Global Compact, the concept has been around for much longer.

At the same time, many studies show that SRI investments outperform conventional instruments, while others have found that they underperform. The analysis highlighted studies that sought to determine the relationship between a company's financial performance and its efforts to implement CSR policies.

Socially responsible investment, or SRI, is a strategy that considers not only the financial returns from an investment but also its impact on environmental, ethical or social change.

SRI versus ESG

The most common types of sustainable investing are socially responsible investing (SRI), which excludes companies based on certain criteria, and ESG, a more broad-based approach focused on protecting a portfolio from operational or reputational risk.

SRI funds tend to outperform non-SRI funds for below-the-median outcomes, and this outperformance is especially strong during bear markets. funds when comparisons are made at the quantiles away from the median.

Raised in a digital, interconnected world, millennials are more aware and concerned about global issues such as climate change, social inequality, and poverty. They aspire to make a difference and are leveraging their investment power to contribute to positive change.

What is the concept of SRI? ›

• An agro-ecological methodology for increasing. the productivity of irrigated rice by changing. the management of plants, soil, water and. nutrients.

Socially responsible investing (SRI) is the practice of actively avoiding investments that conflict with an investor's ethical beliefs. Environmental, social, and governance (ESG) refers to a set of criteria used to analyze the sustainability of a company's behaviors and policies.

For example, companies that operate in the renewable energy space, those that offer fair and safe working conditions, and businesses that align executive pay with shareholder interests are all potential candidates for inclusion in an SRI portfolio.

Socially responsible investing involves choosing or disqualifying investments based on specific ethical criteria. Impact investing aims to help a business or organization produce a social benefit.

Many major studies reviewed by RBC GAM found a clear correlation between strong sustainability business practices and company performance. Findings include: Stock price performance often goes hand in hand with strong governance practices, strong environmental performance and high employee satisfaction.

The most common types of sustainable investing are socially responsible investing (SRI), which excludes companies based on certain criteria, and ESG, a more broad-based approach focused on protecting a portfolio from operational or reputational risk.

The major differences between the two indexes were the S&P 500 ESG index was skewed towards firms with higher environmental, social, and governance (ESG) scores and had a higher concentration of technology securities than the S&P 500 index.

Environmental, social, and governance (ESG), socially responsible investing (SRI), and impact investing are industry terms often used interchangeably by clients and professionals alike, under the assumption that they all describe the same approach.

Socially responsible investment, or SRI, is a strategy that considers not only the financial returns from an investment but also its impact on environmental, ethical or social change.