Socially responsible investing - Definition and Overview

Socially responsible investing, often referred to as SRI, is an umbrella term for a philosophy of investing by both financial and social criteria. SRI investors seek to align their personal values and financial goals by choosing to invest in companies and organizations displaying values comparable to their own.

Modern socially responsible investing has evolved into two groups largely differentiated by political orientation. Conservative SRI investors tend to follow criteria mirroring values of particular religious denominations. Liberal SRI investors follow criteria supporting a variety of values, ranging from environmental protection to workers' rights. There is no one standard of criteria across socially responsible investing, but most SRI mutual funds, whether conservative or liberal, employ screens that exclude companies that manufacture tobacco or alcohol products.