Over the years, many terms have been used interchangeably to describe the incorporation of ethical, environmental or social factors into investment fund management: ethical investment, socially-responsible investment, green investment, responsible investment, to name but a few. The meaning of these various terms all overlap and many have particular resonance for different industry participants.

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The UK Social Investment Forum defines SRI as “investment which combines investors’ financial objectives with their commitment to social justice, economic development, peace or a healthy environment”. EuroSIF refers to “investment which “combines investors’ financial objectives with their concerns about social, environmental and ethical (SEE) issues”.

SRI-CONNECT’s preferred definition for ‘Sustainable and Responsible Investment’ (SRI) is ‘investment which takes sustainable development priorities into account’ or, in full, ‘investment which meets of the needs of the current generation without compromising the ability of future generations to meet their own needs’.

This latter definition aligns SRI closely with the concept of sustainable development as defined by the Brundtland Commission in 1972.

In such a fast-growing area, however, a broad-based term is best understood by reference to its current practical application. We address this on the following pages.