What Are the Different Types of Socially Responsible Investing?

Socially Responsible Investing (SRI), also known as "sustainable development and socially responsible investment," is an investment model that unifies investment objectives with social, environmental, and labor issues. The reptile investment decision-making process combines economic, environmental and social factors. It is an investment with a triple consideration standard, so double is called a "triple bottom line" investment.

Socially responsible investment

Socially responsible investment is a special investment concept, that is, when choosing an investment company, not only pay attention to its financial and performance performance, but also pay attention to the performance of corporate social responsibility, and increase the environmental protection and social protection of the traditional stock selection model. Moral and public interest considerations are a more comprehensive way of investing in companies. At the same time, socially responsible investors can also use their identity as corporate shareholders to promote the fulfillment of good corporate social responsibility through active shareholder actions.

Screening, shareholder advocacy, and community investment are three methods of socially responsible investment. Among them, screening is the most important investment method. Earlier, evasion screening methods were mainly used to avoid companies with poor labor and human rights issues or operating in a commercial environment with frequent civil war, terrorism, and epidemic diseases. Today, new active screening methods are emerging. Using the active selection principle, investors can actively seek companies with good social and environmental records and good corporate governance.

Contemporary Western socially responsible investment originated from the political depression of the 1960s and 1970s, and subsequent industrial disasters, nuclear power plant leaks, oil tanker oil spills, and increasingly serious environmental problems have prompted more and more investors to take social Responsibility is integrated into investment decisions.
Socially responsible investment has made great progress in developed countries such as the United Kingdom and the United States. According to the 2005 bi-annual report issued by the Social Investment Forum, the growth rate of socially responsible investment assets in the United States has increased from 6,390 in 1995 to the Billion US dollars increased to 2.29 trillion US dollars in 2005, a growth rate of 258%. Of the total $ 24.4 trillion of professionally managed investment assets, socially responsible investment accounts for approximately one-tenth. According to the latest statistics, total assets in 2007 have reached $ 2.71 trillion.

As China's largest developing country in Asia, with the increasingly prominent contradictions between economic development, environment and resources, the performance of social responsibility has increasingly become the focus of attention of outstanding companies, and the public's attention to social responsibility has also increased. Domestic corporate social responsibility research And publicity is growing. In 2006, the Shenzhen Stock Exchange issued the Guidelines on Social Responsibility of Listed Companies. In 2007, more than 20 listed companies voluntarily released social responsibility reports in accordance with the Guidelines. Shenzhen Securities Information Company also jointly launched the first socially responsible investment index in the domestic capital market with Teda in December 2007 TEDA Environmental Protection Index. However, compared with countries with more mature socially responsible investment such as the United Kingdom and the United States, the implementation of corporate social responsibility in China is still in its infancy or even in its infancy. On the one hand, the number of listed companies' social responsibility information disclosure is small and the quality is also low. Not high; the three key links in the social responsibility operation system --- social responsibility index, social responsibility investment fund and related intermediary agencies, have just started or are still vacant. Therefore, the development of corporate social responsibility investment must form a A complete and organic operating system still has a long way to go, and it requires the promotion and efforts of all parties.

Overseas, the practice of social responsibility funds for decades has shown that enterprises can achieve both profitability and social responsibility. The investment restrictions of socially responsible funds have not affected the fund's performance, and their long-term investment returns are better than those of other funds. Studies by most western scholars show that there is a positive correlation between corporate social performance and financial performance. It is because of good ideas and investment performance that the growth rate of social responsibility fund assets over the past 30 years is five times that of all other mutual funds. The first and most well-known socially responsible investment index in the United States, the Domini 400 Social Index, has an average annual rate of return of 20.83 during the first 10 years of operation (from May 1, 1990 to April 30, 2000). %, While the average annual rate of return of the S & P 500 index during the same period was only 18.7%.