Socially Responsible Investing (SRI)


Ethical investing and socially responsible (SRI) investing are often confused, but they are not the same thing. Ethical investing is a subset of responsible investing.


The former considers an investor’s values when investing, while the latter can include strategies that are different
to an investor’s values, for instance, Environmental Social Governance (ESG) integration. Other approaches to ethical investing involve negative screening, which is the exclusion of assets that are linked to harm. Inversely, positive screening is where there is an overweight or tilt towards sectors or companies that meet certain positive criteria. This might mean that a portfolio is tilted towards lower carbon emitting companies, e.g. tilted towards renewable energy or to healthcare providers or to tech stocks.

We have found that demand for responsible investing is growing and research studies support this. In Australia, SRI investments now represent more than half of all professionally managed assets, with exceptional growth of 249% between 2014 and 2016. This growth has been accomplished with growth sophistication. A clear majority of Australia’s superannuation funds have made some form of commitment to responsible investing. This represents the growing trend or rather demand from individuals to invest ethically.

How is your superannuation invested?

Socially responsible investing