Social Responsible Investment

SRI, social responsible investment, is an investment model which align with the society, environment and ethics. It considered environment, economy, ethics in its investment decision process. When the investors select the stocks in their portfolios, they will have the preference to the company which has better performance in social responsibilities. The companies can get supplemental finance through the SRI fund. Therefore, the companies can improve their competitive and the companies’ value. SRI can stimulate the company maximize the wealth as well as take the social responsibility, which will lead to the sustainability of the company and society.

Since the differences of understanding about social responsibility, there are many different views about SRI. For example, some people think social responsible investment is equal to traditional religion investment or ethic investment. This view limits the range, method and process of social responsible investment. Currently the most authority definition of social responsible investment is an investment process which is using positive screening technique (according to the social requirement， environment standards, sustainable development and company’s social responsibility to screen investment target) and negative screening technique (some enterprises which are violation of ethics like alcohol, gambling and tobacco) to invest. Furthermore, SRI should be in the strict framework of financial analysis, and considering the results of society and environment. Compared with the investing strategy which is just pursuing the profit, SRI makes a great progress. The investors of SRI not only are the stakeholders, but also the value creators of the company. Beside the stockholders, customers, employees, suppliers and some other stakeholders can be also considered as value creators. Therefor the process of social responsible investment could be understood as the process of discovering the company’s value based on