Insightful articles on the world of finance and investing

27 Jul 2020
A Brief Guide to Socially Responsible Investing

It’s a bit of a conundrum, isn’t it?  We all want to feel like we are doing the right thing and not putting our money where it is causing harm.  But we also want a good return on our hard-earned savings.

Welcome to socially responsible investing.

This is the broad term for an investment approach that looks to invest in companies delivering both a financial return and a social benefit.

For more information watch this short video or read on.

The most common approach is for Socially Responsible (or SRI) funds to utilise a ‘negative screening’ process.  It specifically seeks to exclude certain companies or industries assessed as having a negative impact on society, such as industries associated with armaments and tobacco.

Certain funds will also take into account additional environmental and sustainability factors which may include some, or all, of the following:

  • Carbon and other greenhouse gas emissions or potential emissions
  • Land use
  • Biodiversity
  • Involvement in toxic spills or releases
  • Operational waste
  • Water use
  • Child labour
  • Alcohol
  • Pornography
  • Gambling
  • Factory farming activities

At Cambridge Partners, our SRI portfolios place an emphasis on supporting higher levels of social responsibility, whilst remaining faithful to the underlying attributes of prudent investment, which include low cost and wide diversification.

For more information, talk to your Cambridge Adviser, or visit our dedicated web page.