What does socially responsible investing (SRI) aim to achieve?

Socially responsible investing (SRI) aims to achieve a balance between generating financial returns and promoting social good. This investment strategy incorporates environmental, social, and governance (ESG) criteria to evaluate potential investments. Investors engaged in SRI consciously seek out companies and funds that align with their values, such as those promoting sustainability, ethical labor practices, and positive community contributions. By doing this, SRI investors hope to foster positive change while still earning competitive financial returns.

This approach reflects a growing recognition that financial success can be coupled with responsible and ethical considerations, as investors increasingly wish to support businesses that align with their personal beliefs and values. In contrast, the other options do not incorporate this dual focus, whether through a sole emphasis on financial returns without ethical considerations or by targeting specific types of investments like government bonds, which do not inherently align with SRI’s goal of social impact. Lastly, the idea of encouraging irresponsible corporate behavior is fundamentally opposed to the principles of SRI, which actively seeks to avoid such practices.