Socially Responsible Investment: Is it profitable?

Socially Responsible Investment (SRI) is a special investment philosophy that chooses to invest in enterprises not only concerned about its financial results for the performance, while concerned about the fulfillment of corporate social responsibility (Eurosif, 2010). And the traditional stock selection model, that can increase corporate environmental protection, social morality and public interest considerations, a more comprehensive study of corporate investment. In addition, that the SR of investors and also to apply their corporate identity of the shareholders, through active shareholder activism, to promote good corporate social responsibility (CSR) to fulfil. Regarding to Strasser (2011) explained that no universal definition for SRI. What drives socially responsible investment?

In recent years, with the deepening of economic globalization, people began to concern about global climate, environmental and other issues are increasing. CSR has become an important topic of extensive domestic and international concern. And SRI is it profitable? It is a combination of investment decisions and the economic, social, environmental unity of an investment mode. Investors not only be interested in the traditional return on the money, but also take into account social justice, economic development, world peace and environmental protection, so as to achieve sustainable development. Furthermore, as Strasser (2011) shows that in 2006 the United Nations launched the Principles for Responsible Investment (PRI), which is meant to be the first global benchmark for responsible investments.

Recent events like for instance the financial crisis, the nuclear catastrophe in Japan, global warming or the BP oil catastrophe might have been important factors for the large growth within the SRI industry. The development of SRI over recent years and that highlights the prospects for an increasingly strong connection with the practice of CSR (Sparkes and Cowton, 2004).

This can be reflected by the Clark (2012) reported that the chancellor has unsettled renewable energy investors by unequivocally backing a central role for gas in Britain’s energy mix. And according to Mr Osborne has said gas is cheap, has much less carbon than coal and will be the largest single source of our electricity in the coming years. Also unveiled £3bn of tax allowances to boost North Sea oil and gas investment. Moreover, he has comments come amid debate over whether a so-called “golden age of gas” will provide so much cheap and abundant natural gas that it will lock in years of investment in the fossil fuel at the expense of renewable energy sources, such as wind and solar. In addition, Mr Osborne remarked that renewable energy will play a crucial part in Britain’s energy mix – but I will always be alert to the costs we are asking families and businesses to bear. Environmentally sustainable has to be fiscally sustainable too (Clark, 2012).

SRI is a special kind of investment approach, and to fulfill their SR by not asking the enterprise to solve all social problems, but to pay attention to the most relevant to business operations activities with significant or potential impact on substantive issues, stakeholders, and will fulfill their social responsibility and enterprise production and management together. CSR must also adapt to the basic national conditions and the actual business of the national economic and social development, to understand and grasp at a higher level and broader scope.