Socially Responsible Investing (SRI) means many things, look no further than the acronyms it stands for…sustainable and responsible investment, socially responsible investment and the shorthands; sustainable investment, social investment, and responsible investment. Your understanding, if you've heard of SRI, is likely to be influenced by where you live in the world. In the US for example people understand SRI to be mostly about screened funds and shareholder action, while in Europe the understanding of SRI is more dominated by ecological drivers such as resource constraints throwing up opportunities for clean energy, water and eco-efficiency. In Japan SRI is ecological, it is also about CSR nationally with a certain discomfort at looking at the behaviour of Japanese companies globally. In China the first SRI fund, launched last year, is focussed almost entirely on corporate governance issues. In Australia some leading funds have chosen to invest in nuclear, while in many countries nuclear is not an SRI option because of waste and proliferation concerns. Meanwhile across the Islamic world, the growth of Shariah compliant funds is seen as a further expression of SRI. How will this melange of understandings evolve over the next 15 years? Does it matter that SRI is interpreted so broadly? In my view, it does not matter so long as core concerns about ecology and social equity remain strong. More importantly, what is evident now is that SRI, in whatever shape or form, is emerging as an international phenomenon. This was not the case 15 years ago.
Subscribe to Green Money Where next for SRI and will it become a fully integrated dimension of equity markets the world over?[1] There are two ways to answer to this question: the first is the dispassionate consideration of what is likely to be, the second is what I would like to see given this century's challenges. What we face and need to be ready for is millions more people entering the world of consumerism, expecting the earth-shatteringly destructive yet superficially so peaceful and prosperous looking way of life the majority take for granted in the west. On top of this social revolution add the impacts of climate change, resource constraint, religious and racial intolerance and widening wealth gap and you have a recipe for altered nations and norms. One thing is for sure we're going to see big changes.
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