About SRI

What is ‘SRI’?

FEM-tag-cloud‘Sustainable and Responsible Investment’ is a broad term used to describe investments which pay close attention to environmental, social, ethical and/or company governance related issues.

This market is sometimes seen as complex, but in essence these are simply regular investment funds that take additional factors into account when deciding where to invest.

These funds have been available to individual investors since the mid 1980’s and different options have emerged to meet the needs of different investors.

The UK’s earliest funds was launched primarily to meet the needs of Quaker and Methodist investors.  Other funds soon followed with broadly similar strategies – focusing on personal, ethical values. A second wave of funds emerged a few years later – with a greater focus on environmental and sustainability related issue (some brought ‘ethical values’ into the mix more than others).

At around the time of the millennium a third strand emerged – which involved using ‘responsible share ownership’ as a means of actively encourage higher corporate standards – in order to help improve longer term shareholder returns.

With growing activity in the institutional and the pensions markets in recent years this area ‘responsible ownership’ has flourished alongside a newer trend known as ‘ESG’.  This strategy is largely about bringing ‘environmental, social and governance’ issues into investment decision making – to help reduce risk.

Today there are many different fund managers combining these different strategies in many different ways – so individual investors enjoy greater choice than ever before.

However, within terminology and labels are used differently by different people.  Our view is that it is best not to get too hung up on jargon – but it is  important to check what people mean when they use a particular label or acronym.  For example, the term ‘SRI’ can also be used to mean ‘socially responsible investment’, a term we have borrowed from the USA.  (We do not agree with this view as it overlooks the importance of ‘environmental’ issues – which is integral to many of these funds strategies.)

Our system of ‘SRI Styles’ helps to highlight the different options that are available.  However users of this system should bear in mind that  funds are often designed to appeal to investors with a wide range of interests.  As such, there is some crossover between the styles – as well as differences within the style groupings.

(The ‘SRI Policy’ and ‘Other Features’ filters on Fund EcoMarket help users to refine their searches further for this reason!)

The ‘SRI Styles Explained’ area explains further.

This service is provided for information purposes only please speak with a qualified financial adviser for further information.

We do not deal directly with investors and are not authorised to offer advice.