nvironmental effects while also generating financial gains by investing in businesses which work towards bringing about a positive social change. Impact investing helps solve social or environmental problems while generating financial returns. [8] Since the intention here is to generate measureable social or environmental impact, it is distinguished from the negative screens strategy as it explicitly focuses on making a positive impact on the society and environment. This kind of investing is at the intersection of philanthropy and for-profit capitalism. It can act as a complement to philanthropy and government policies to address the social and environmental challenges which we face today at a global level. [6] It is the future of how we should think about businesses because all businesses have a social impact whether good or bad.

Cambridge Associates, a global investment firm, in partnership with Global Impact Investing Network, a non-profit organization dedicated to increasing the scale and effectiveness of impact investing [13], carried out an analysis of the financial performance of impact investing. Post analysis they concluded that the Internal Rate of Return (IRR) of the Impact Investing funds were similar to the IRR’s of comparative funds. [9]

5. Conclusion

Socially Responsible Investing is the future of how we should think about businesses. All businesses have a social impact whether good or bad and through SRI we can steer the investment portfolios away from companies causing negative impact towards the companies which are generating positive impact by working towards a sustainable future. And as many studies have suggested that portfolio returns of SRI funds are comparable to unrestricted investment, there is no reason why one should not follow SRI.  The trends in SRI are positive as more and more investors are moving towards SRI. According to a study by Cerulli Associates, one of six dollars under professional management in the US is involved in socially responsible investing. [11] Though SRI cannot be viewed as a one stop solution to the global sustainability challenges we are facing today but it can certainly act as a complement to philanthropy and government policies to address these challenges.