OPINION: Socially responsible investing an expensive taste
Other benefits like peace and a livable planet notwithstanding, the financial cost of socially responsible investing appears to be high.
Socially responsible investing (SRI) has been one of the few boom areas of active management. Funds managed to SRI mandates soared to $8.1 trillion in 2016 from just $1.4 trillion in 2012, according to the Forum for Sustainable and Responsible Investment.
Rather than simply gunning for the highest return, SRI seeks good returns but screens companies for other factors like environmental and social impact. Though the range of SRI screening criteria varies, they generally include a company’s impact on the environment, the communities in which it operates and its corporate governance.