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What Is SRI?

Socially Responsible Investing (SRI) is an established framework and methodology for maximizing your asset value while attending to your environmental, social, and corporate governance (ESG) concerns. Given that our values may differ, there is no single way to determine how best to invest with social responsibility.

Most people are concerned with the environment, society, and corporate behavior, yet we tend to focus on particular elements of these concerns. These particulars are informative in creating an SRI strategy. Another way of describing the investment strategy used while incorporating values is "sustainable investment strategy."

Given the complexity of SRI options, guidance can be helpful in developing a socially responsible financial plan. We believe that an SRI strategy is best utilized with a financial planner who understands the wide variety of SRI options. Fortunately, there are financial planners who specialize in SRI advice.

For those of us who have less than $100,000 in assets, a financial plan is easy. By following basic rules you can create your financial plan within an SRI framework.

For those of us with more than $100,000 in assets, working with a financial planner knowledgeable in SRI yields great value to your portfolio and the world.

A correctly implemented financial plan which uses SRI principles ensures that your finances not only yield value when you need it (retirement or kids going to college), but also matches a thriving and positive future.

The Grid

Socially Responsible Investing is concerned with three areas:

  • Environment
  • Social Justice
  • Corporate Governance

There are three investor activities associated SRI:

  • Screen-out bad companies, Screen-in good companies when buying securities.
  • Shareholder Action - vote your proxy (stockholders usually have a vote in corporate decision making).
  • Community Investment - you can lend your money AND get paid interest AND get paid back AND help the world.

The graphic below represents the realm of SRI showing the areas of concern across the top (Environment, Social Justice, Corporate Governance) and the activities involved down the left side (Screening, Shareholder Action, Community Investment). Basically, what you can do down the side, where you can do it across the top.

At the intersection of each we have presented examples of SRI. This should help you understand the context and actions you can take in your socially responsible investing.