Sustainable and Responsible Investment (SRI), also known as Socially Responsible Investment, is investment which allows investors to take into account wider concerns, such as social justice, economic development, peace or a healthy environment, as well as conventional financial considerations.

The most successful SRI funds provide investors with dual returns:

1. Financial returns that compare well to, and often exceeding, the returns of conventional investments

2. Social and environmental rewards that go beyond the direct financial return to the investor.

SRI is therefore a positive economic choice about the way we live and the world we live in.

In a practical sense, SRI can be grouped into three categories:

Portfolio Screening - the inclusion or exclusion of stocks and shares in unit trusts, investment trusts or other investment portfolios on ethical, social and/or environmental grounds.

There may be screens to exclude unacceptable shares from the portfolio or screens to actively select companies with superior social and environmental performance, thereby contributing to more sustainable economies.

There may also be corporate ratings so that companies are selected on a "best of class" basis. For more details of Portfolio Management techniques please see SRI and the Markets.

Shareholder Engagement - Investors can use their status as shareholders to improve a company's ethical, social and/or environmental behaviour by means of dialogue, pressure, support for responsible management and voting at AGMs.

Community Investing - supporting a particular cause or activity by financing it by investment or loans. Community investing includes microcredit and revolving loan schemes. Some of the best know examples of community investing originated in Asia.

For example, the Grameen Bank of Bangladesh which by Nov 2000 had already lent $3.2 billion to over two million people (90% of whom were women and 100% classified as very poor) with a repayment rate of 98%.

Community investors may seek a financial return at lower than market rates in order to achieve a particular "social return" for society from their investment. Unlike making a donation, cause-based investors or the social finance organisations investing on their behalf require, at a minimum that the original value of the investment can be returned by either repayment (for loans) or trading (for shares).

Types of SRI Investment

There are many types of SRI, from financial support to new businesses and community activities (eg the Calvert Foundation), to investment funds trading the shares of companies listed on the world's stock markets (look at the Performance charts, coming soon), to private portfolio management for individuals and institutions such as pension funds and churches (eg the Women's Division of the General Board of Global Ministries of The United Methodist Church, US). In every case there is a suitable SRI strategy to employ.

ASrIA plans to build on the success of SRI in America and Europe to help SRI take root in Asia (see About ASrIA).

Can You Help?

If you think you can help us or know others who can, please get in touch.

Visit our SRI Guide, a colourful and interactive site for young investors, civil society members and consumers