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SRI - environmentally, socially and financially useful

Thinkpiece

Publication date:

19 September 2016

Last updated:

18 September 2019

Author(s):

Policy and Public Affairs, Julia Dreblow

Examines how the retail Sustainable, Responsible and ethical Investment (SRI) market got to where it is today and why accelerating the integration of ethical, social and environmental factors into retail investment planning makes sense.

  • Retail sustainable, responsible and ethical investment fund options (SRI) emerged in the 1980s, and have expanded and diversified significantly since 2000 as a result of diverse investor aims, opinions and motivations.  Strategies include screened and themed funds options as well as the option to select fund management companies based on corporate level SRI related activities and strategies.
  • The market can be simplified by breaking it down into the eight 'SRI Styles' segments: Ethically Balanced, Negative Ethical, Sustainability Themed, Environmental Themed, Social Themed and Faith Based fund options plus Responsible Ownership and ESG Integration corporate level options.
  • The clearest indication of the benefits of additional Environmental, Social and Governance (ESG) research is the fact that many of the world's largest investors now integrate ESG issues into risk management and investment analysis across the board.
  • SRI offers investors the option to align lifestyle choices, interests, values and opinions into investment planning. Many may also want to reflect their views on emerging mega trends and changing business strategies.  
  • Shifting the 'conversation' away from purely financial matters and towards opinions and the way in which returns are generated can help to personalise the investment advice experience by adding context and personal relevance.
  • 'Conversations' of this kind are becoming increasingly important as issues such as sustainability and climate change are becoming ever more important to both business and investors.  By offering people the option to bring their values and opinions into their investment strategy the financial services industry can start to reconnect with investors who have been put off by today's prevailing culture.

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This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.