Sustainable investment, sometimes referred to as socially responsible investment (SRI) or impact investing, is a type of investment that emphasizes positive social change by taking into account both financial returns and moral values. This approach goes beyond ESG analysis, which shapes valuations, by actively eliminating or selecting investments according to specific ethical guidelines. The underlying motive could be religion, personal values, or political beliefs. The term socially responsible investing is often used interchangeably with sustainable investing, responsible investing, and impact investing.
The general objective of this type of investment is to achieve competitive financial returns while having a positive impact on society or avoiding investments that conflict with the investor's personal values. There are different types of socially responsible investments depending on the method used. The United Nations Principles for Responsible Investment (PRI) are a network of investors supported by the UN who work to identify, promote and ensure the adoption of environmental and sustainability practices in financial institutions. This type of investment provides people with the opportunity to make more ethical decisions by adding an additional investment criterion that allows them to focus on investments that change society in a positive way. ESG criteria refer to the environmental, social and governance practices of an investment that can have a significant impact on its return. Studies have shown that companies that meet the requirements of the Socially Responsible Investment Index (SRI) in submitting sustainability reports to the public are more likely to have greater transparency in communicating with non-financial stakeholders and investors. Impact investing is an investment strategy designed to allocate money to positive social change while generating returns.
This trend evolved in the 1960s when people began investing in projects that also promoted civil rights. Socially Responsible Investing (SRI) involves investing in companies that promote ethical and socially conscious issues such as environmental sustainability, social justice and corporate ethics, as well as fighting against sexual and gender discrimination. When it comes to your investment portfolio, you can apply ESG factors to your investment decisions and choose companies that actively promote gender equality. This type of investment allows you to align your portfolio with your ethical principles.
