Socially Responsible Investment (SRI) can be defined as an investment process, which combines the investors’ traditional financial objective with a commitment to social and environmental responsibility. It has evolved from primarily involving negative screening – ie avoiding investments in tobacco, gambling and armaments – to positive screening, using social and environmental criteria to identify best-in-class companies.

SRI has in recent years been the fastest growing area of equity investment. Even though the development of SRI has been most significant in the U.S. and Europe, the SRI sector is also rapidly developing in other parts of the world.

There is no single answer to why SRI has experienced such an impressive growth. Scandals like Enron and WorldCom have created a need for corporate openness and transparency – socially responsible corporations are seen as being better at managing risks and opportunities on a long term – and consumers are increasingly aware of corporations’ ethical behaviour. These are just a few of the contributing factors.