Is there a difference between socially responsible investing (SRI) and green investing?

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.

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