Socially Responsive Investing (SRI) has grown significantly since the turn of the century as investors and fiduciaries have expanded their definition of portfolio returns to include the externalities that can arise from their investment decisions.
In response to this growth, the investment industry has developed approaches to support those investors and fiduciaries interested in implementing a social investment program. As SRI has continuously progressed, the traditional terminology has evolved as well to include labels such as Responsible Investing and Sustainable Investing. Nonetheless, despite the growth and high level of interest in SRI, there are a few fundamental questions that remain.
- Is the investment portfolio the appropriate vehicle to express the moral or social values of an organization?
- Should the investment portfolio be solely focused on achieving the highest economic value through traditional investing, thus maximizing the financial resources available to an organization that can be devoted to meeting its mission?
- Do socially responsive screens even matter when assessing portfolio performance?