Sustainable and Responsible Investment

What is Sustainable and Responsible Investment?

Any investment that significantly considers environmental, social, ethical or governance issuesmay be classed as ‘SRI’:  a ‘sustainable’, ‘responsible’, ‘ethical’ or ‘ESG’ fund.

SRI includes investment styles that are commonly referred to as ‘ethical investments’ and ‘green investments’ and may cover almost any asset type – although non equity options are less common than equity options.

These terms are broad descriptions of an important part of some funds’ investment processes that are applied to a greater or lesser extend by different managers.

Such strategies may refer to how investments (typically equities or bonds, but also property and oher assets) are bought, sold or managed by investment managers.

In the individual investor (retail) market screened ethical funds were widely regarded as the best known area of SRI however Sustainability funds now outnumber ethical options

There are around 150 core (or primary) onshore, retail SRI funds available for individual UK investors – although there are hundreds more sub-funds. These consider a wide range of investment issues, approaches and strategies.

Click here to for our SRI Styles Directory (now hosted on Fund EcoMarket) alongside our free to use fund tool)

What makes SRI funds different from other investments?

What makes SRI funds different from other investment styles is the additional environmental, ethical, and /or governance information an investment manager take into account – and how they deal with it.

Together, the SRI issues considered and the approach applied to them, form a fund’s SRI strategy. Both the approaches employed and the issues covered can be very diverse with different investment managers dealing with different issues in different ways.

SRI offers many different asset types, ethical approaches and investment options. As such these funds cannot sensibly be grouped together in a single group or sector as they often have little in common.

There are no universally agreed rules or definitions that dictate what is or is not an SRI, green or ethical investment – so it is useful for advisers to familiarise themselves with the different core strategies rather tahn simply relying on labels. (This can be a good investment of time as interest in this area is growing fast).

A database of regulated retail SRI funds is accessible via our Fund Eco Market tool.

SRI Services materials are for information only and intended for use only by financial services professionals. We are not authorised or regulated, can not offer advice and do not deal with individual investors. The information we supply is not to be regarded as endorsements or recommendations and we recommend intermediaries use the information we publish in conjunction with other sources. Whilst we make every effort to ensure our information is up to date and accurate we can not be held responsible for decisions made using our services or those linked to our sites.

Registered Company: SRI Consultants Ltd. Company No: 03904843