Make a Difference
The idea behind SRI—also called environmental, social, and governance (ESG) investing—is to help investors pursue their financial goals while promoting societal well-being. By choosing a socially responsible investment vehicle, you are essentially funding companies that support causes you care about, companies that don't engage in practices that run contrary to your values, or both.
For example, you might choose to invest in companies that promote:
- Environmental protection
- Community development
- Workplace diversity
- Human rights
On the other hand, you might decide to avoid investing in companies involved in:
- Alcohol, tobacco, and gambling
- Nuclear power
- Animal testing
The investment managers who create and oversee SRI portfolios evaluate companies according to specific values-based criteria, or "social screens." As an investor, you can evaluate an SRI investment vehicle based on its objectives and the social screens it employs.