Sustainable and Responsible Investment


‘Sustainable and responsible investment’ – usually referred to as simply ‘SRI’ – is a term used to describe investment in only those funds that positively support environmental, social, ethical and governance related issues. As a preliminary decision, sustainable and responsible investment does not initially consider the financial aspects of a fund; its concern is solely with the fund’s attitude towards environmental and green issues, social and ethical responsibility and corporate governance.

Although every investor wants to put their money into a fund that will return a profit, there are many who, for reasons of conscience, do not want to invest in a particular company or industry due to either its activities or conduct. Typical examples of this are companies who may be involved in something that is considered to be detrimental to the environment, are believed to be socially irresponsible, have ethically indefensible ways of working or are thought to ignore or pay lip-service to corporate governance rules.

Generally, those considering sustainable and responsible investment apply ‘moral criteria’ first, a process that screens funds, removing those that are investing in companies and industries whose activities and conduct do not match the investor’s views or beliefs. Having done so, the investor then applies their chosen financial criteria to the remaining funds to decide which will best meet their objectives.

Terminology – note!

At this point, it’s important to note that ‘SRI’ can mean different things to different people. Over the last two decades, the overall focus of the concept has evolved so that, particularly in the UK, ‘SRI’ has come to mean ‘sustainable and responsible investment’ – however, and particularly in the USA, the same acronym is used for ‘socially responsible investment’, a strategy also known as ‘impact investment’.

There’s a significant difference between the two concepts: sustainable and responsible investment adds an additional element – the environment – to those covered by socially responsible investment.

It’s vital that potential investors are aware of the difference between ‘SRI’ and ‘SRI’, especially if they are concerned about environmental issues. Not realising the distinction may lead to them unwittingly investing in a fund that, although labelled as ‘SRI’, does not, in fact, embrace the very issues they are interested in.


Although it’s easy to think that the concept of SRI is something that’s relatively new and, perhaps, driven by 21st-century concerns about the environment and humanity, it has a rich history that can be traced back to Biblical times.

However, the roots of socially responsible investment – as we perceive it today – are firmly in 18th-century America. Methodist and Quaker investors refused to invest in any company that had links to the slave trade, or those involved in manufacturing liquor or tobacco or promoted gambling or war – the ‘sin’ industries as they were then known. In 1928, specifically with a view to helping investors avoid these industries, the first publicly offered, socially responsible fund – the Pioneer Fund – was offered by an investment group in Boston, Massachusetts.

The concept of socially responsible investment changed up a gear during the 1960s when Vietnam War protestors demanded that university endowment funds were not invested in defence contractors; the long-standing principles of socially responsible investment had become a main-stream investment philosophy.

Since then, world events have continued to shape socially responsible investment, both in what the term ‘SRI’ stands for and its significance as an investment strategy. Growing concerns about the environment added a ‘green’ element to the mix, something which redefined ‘SRI’ to mean ‘sustainable and responsible investment’.

Apart from addressing investor concerns, research has shown that companies that care about the environment, promote equality and enforce financial guidelines also tend to accrue tangible benefits for those who invest in them.

How sustainable and responsible investment happens

Deciding to use SRI as a strategy does add an additional ‘layer of complexity’ when choosing investment funds as, of course, information about the funds green and ethical credentials are needed. Fortunately, thanks to SRI Services (, help is both at hand and freely accessible.

Formed in 2010, SRI Services is the UK’s only independent company devoted entirely to advancing sustainable and responsible investment funds; funds defined as being designed to meet the needs of individual investors who have an interest in environmental, social and/or ethical issues. The company is not regulated and is not authorized to offer investment advice, nor does it deal directly with individual investors; its self-avowed purpose is ‘to help change the way people invest’ by providing relevant investor information.

To do so, SRI Services launched the Fund EcoMarket Database ( in 2011, an online information hub designed to bring together everything investors need to know about funds that present themselves as having sustainable, responsible and ethical credentials. The website provides a growing directory of SRI-screened funds, classified into ‘SRI Styles’, along with an extensive library of support material.

SRI Styles

Fund EcoMarket is a free-to-use, whole-of-market, information tool that helps users understand and compare the many different sustainable, responsible and ethical fund options that are available. To achieve this, it groups together ‘similar’ funds into nine ‘SRI Styles’, allowing investors to easily identify, review, assess and choose funds that meet their green and ethical investment criteria. The nine SRI Styles are:

Sustainability Themed
Investment funds which focus on sustainability related issues and opportunities when making investment decisions.

Sustainability Tilted
Investment funds which integrate sustainability issues into investment decision making.

Environmental Themed
Investment funds which focus on environmental standards and practices when making investment decisions.

Social Themed
Investment funds which focus on social issues when deciding where to invest.

Ethically Balanced
Investment funds which primarily apply a combination of negative and positive ethical criteria when deciding where they can or cannot invest.

Negative Ethical
Investment funds which focus on applying negative ethical avoidance criteria when deciding where they can or cannot invest.

ESG Plus
Investment options which significantly include environmental, social and governance (ESG) issues into their investment research to improve risk management.

Faith Based
Funds that are specifically designed to meet the needs of a named faith or religion.

Responsible Ownership
Investment managers who use share/asset ownership as a means to encourage more responsible business practices – mainly through dialogue and voting.


In 2020, SRI Services launched Dialshifter (, an industry-backed initiative aimed at making investment funds, service providers and advisers involved with green issues immediately and publicly recognisable.

How can One Financial Solutions help you?

“It’s not about timing the market, it’s time IN the market that counts.” is another of Warren Buffet’s legendary quotes. Apart from re-emphasising that investment should be treated as a long-term venture, it also underlines that ‘being in the market’ helps build the all-important store of knowledge and experience you need to be successful – something you can’t pick-up quickly.

One Financial Solutions is here to help you. Our advisers are experts who live and breathe investment – it’s how they make their living. They’ll take time to talk to you about your financial objectives, the level of risk you’re prepared to accept and any investment preferences you may have. They’ll provide expert guidance and, once you’re happy to go ahead, they’ll put everything in place and keep you updated for the duration of your investment.

So, if you’re looking for help with any aspect of investment, please call us on 020 3714 9565 or ask us to call you by sending an email to


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