This type of investment describes an investment strategy which combines the intentions to maximize both financial return and social good.

Since the late 1990s, socially responsible investing has become increasingly defined as a way to promote environmentally sustainable development.Issues such as climate change, which may pose a threat to investment portfolios or offer lucrative investment opportunities in biofuels and other renewables, are helping to make the environment a more prominent consideration for investors. Unlike traditional forms of responsible investment, business case rather than ethical motivations are driving this market for socially responsible investing.

Government-controlled funds such as pension funds are often very large players in the investment field, and are being pressured by the citizenry and by activist groups to adopt investment policies which encourage ethical corporate behaviour, respect the rights of workers, take environmental concerns into account, and generally avoid violations of human rights. One outstanding endorsement of such policies is the Norwegian Government Pension Fund, which is mandated to avoid "investments which constitute an unacceptable risk that the Fund may contribute to unethical acts or omissions, such as violations of fundamental humanitarian principles, serious violations of human rights, gross corruption or severe environmental damages.

Socially responsible mutual funds counted by the 2003 Trends Report increased in number to 200 in 2003, up from 181 in 2001, 168 in 1999, and 139 in 1997. Assets in socially screened mutual funds identified by the Trends Report grew by 19 percent, to $162 billion, up from $136 billion in 2001. More than half (51 percent) of this growth is attributed to both newly identified and newly created funds, and 49 percent represents growth in existing assets. In terms of attracting investor assets, socially screened mutual funds grew on a net basis in 2002 while the rest of the mutual fund industry contracted. According to Lipper, socially responsible mutual funds saw net inflows of $1.5 billion during 2002. Over the same time period, U.S. diversified equity funds posted outflows of nearly $10.5 billion.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Socially responsible investing".