Sustainable investment, also known as "socially responsible" investment (SRI), has grown enormously in the past decade. In the early days, it was regarded as a fringe interest, mainly for small investors with strong views on the environment and human rights. Since then, the amount of money invested in "sustainable" funds has increased dramatically, and many of the large financial services firms have begun offering their clients a "sustainable" option.
An exact definition of "sustainable" or "socially responsible" investment is hard to pin down. For example, some investors are anxious to avoid putting their money into firms that manufacture arms, alcohol or tobacco. Others want to avoid companies that excessively pollute the environment.
For more radically-minded individuals, an SRI fund should not merely "screen out" companies whose activities are regarded as unsustainable; it should actively seek out those firms that are breaking new ground in social and environmental performance.
For this reason, ethical investors are usually advised to shop around, and to read the small print of the fund managers literature before committing any money to the fund.
