Socially Responsible Investments

Abstract

Socially responsible investments (SRI) are a confluence of money and ethics, simply known as “ethical investments”. SRI has laboured for more than 5 decades now to gain recognition as an investment strategy, and today, it has reached a juncture where it is being considered as a potential player for mainstream investments.

Companies are evaluated on the basis of E (Environmental), S (Social) and G (Governance) criteria to qualify as being socially responsible. SRI works on the dimensions of investment screening (acts of commission and omission), investor advocacy (practicing investor’s rights for advocating corporate ethics) and community investments (investing in CSR initiatives). Total SRI assets under management in 2010 were 7 trillion Euro globally, and the major contributors were Europe with 70% market share followed by US with 28% market share and remaining 2% from rest of the world.

Popularity of SRI in India is facing resistance from all the three stakeholders of investment community, namely; Governmental bodies and authorities, corporates and investors. The paper contributes in terms of recommendations towards adoption and implementation of SRI as a sustainable investment strategy in the Indian context.

Keywords: Socially responsible investments, CSR (Corporate Social Responsibility), ESG (Environmental, Social, Governance) criteria