The Forum for Sustainable and Responsible Investment (US SIF) defines sustainable, responsible, and impact investing (SRI) as “an investment discipline that considers environmental, social, and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.” Interest in responsible investing has grown in recent years, and investors are often motivated by a range of factors when incorporating these strategies into their long-term portfolios.

Responsible investors seek strong financial performance while also aiming to advance environmental, social, and governance best practices. They may pursue high-impact investments designed to deliver meaningful societal or environmental benefits. In addition, some institutional investors are adopting responsible investment strategies as a way to manage risk and fulfill their fiduciary responsibilities.

Responsible investing encompasses a range of strategies. These include incorporating environmental, community, societal, and corporate governance factors into investment analysis and portfolio construction. It can also involve community investing, which seeks to finance projects and institutions that support underserved communities in the United States and abroad. For investors in publicly traded companies, it may include filing shareholder resolutions and engaging in other forms of shareholder advocacy.

These approaches are often used together to promote responsible business practices and to direct capital toward positive social and environmental outcomes across the broader economy.