A:

There isn't a huge difference between socially responsible investing (SRI) and green investing; green investing is actually a form of socially responsible investing. Both of these terms refer to investment philosophies that are backed by ethical guidelines that help to steer the investment selection process. The biggest difference between the two is the overall scope of the investment philosophies' focus: green investing is more narrow in its focus when compared to socially responsible investing.

Green investing is mainly focused on investing in companies and technologies that are deemed to be good for the environment. This includes individual companies that have a solid track record of reducing the environmental impact of their operations, as well as companies that offer alternative energy technologies such as solar and wind power. Green investors will also avoid investing in companies that have a negative impact on the environment, such as companies with poor emissions standards.

Socially responsible investing is broader in its focus in that it considers companies that create a social and environmental benefit, and avoids companies that have a negative effect on society. Companies with a strong record of charitable contributions, that provide a fair and diverse workplace, and/or that have a minimal impact on the environment are just a few examples of social responsibility. A major part of socially responsible investing is the exclusion of certain industries that are deemed to have a negative impact on society, including those involved in alcohol, tobacco and defense.

For more insight, read Change The World One Investment At A Time.

RELATED FAQS
  1. What is a "socially responsible" mutual fund?

    As the name suggests, socially responsible mutual funds invest exclusively in socially responsible investments. Securities ... Read Answer >>
  2. What are green investments?

    Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the ... Read Answer >>
  3. Does investing in sustainable or "green" companies provide lower returns?

    To determine the kinds of returns that can be expected from investments in sustainable or "green" companies, the distinction ... Read Answer >>
  4. What is socially responsible investing?

    In the financial world, where profit and return are often the priorities of the average investor, the vehicles we use to ... Read Answer >>
  5. How do you craft an effective social responsibility policy?

    Craft social responsibility policies to brand the business, provide direction for the company's mission and motivate employees ... Read Answer >>
  6. Why is social responsibility important in marketing?

    Drive consumers toward products and services by prioritizing social responsibility in marketing to enhance the company's ... Read Answer >>
Related Articles
  1. Financial Advisor

    Investing in More Than Money: A SRI How-to Guide

    Here's how socially responsible investing stacks up against green and impact investing. Which category is right for you? Read on.
  2. Investing

    When Socially Responsible Investing Hurts

    Socially responsible investing can make you feel good but it may not boost your returns.
  3. Managing Wealth

    Go Green With Socially Responsible Investing

    Find out how morals and ethics can bring you a surprising return.
  4. Investing

    Green Technology: A Solid Investment Choice?

    With global investing in green energy on the rise, there are abundant opportunities for environmentally responsible, financially sound investments.
  5. Investing

    Socially Responsible Mutual Funds

    It is possible to avoid unethical investments and still profit from mutual funds. Find out how!
  6. Insights

    What Does It Mean To Be Green?

    Green investing is the new buzz word for companies and investors. Find out what it means.
  7. Managing Wealth

    "Value" Investments: Social, Faith & Eco-Investing

    When it's time to invest, why not follow your heart along with your head? These four types of investments seek to do good while returning a profit.
  8. Financial Advisor

    Impact Investing: Making A Difference And A Profit

    Most investors spend their time chasing returns. But what if there was a way to do good while also turning a profit?
  9. Investing

    Make Employees Happier with This Simple Tip

    Offering socially responsible options is a good way to increase employees' sense of satisfaction, which can lead to improved morale among other things.
  10. Financial Advisor

    Millennials Are Pushing This Hot Investing Trend

    Socially responsible investing is really important to young investors. Here's why advisors should consider such investments.
RELATED TERMS
  1. Socially Responsible Investment - SRI

    Socially responsible investing looks for investments that are ...
  2. Impact Investing

    Investing that aims to generate specific beneficial social or ...
  3. Green Investing

    Investment activities that focus on companies or projects that ...
  4. Green Fund

    A mutual fund or other investment vehicle that will only invest ...
  5. Social Responsibility

    The idea that a company should embrace its social responsibilities ...
  6. Social Finance

    Social finance typically refers to investments made in social ...
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center