Socially-responsible investment screening involves selecting companies in a portfolio based on social or environmental criteria. Typically, socially responsible investors exclude or screen out certain companies for products or practices that have a negative social or environmental impact. Positive screening involves selecting companies based on their positive contributions to society or the environment.
Social investors know there are no perfect companies. The screening process attempts to identify companies that are well-managed, that produce socially useful products and that treat their employees, suppliers, customers and the environment in which they operate well. Screening decisions can involve some trade offs which are informed by careful research and evaluation.
There are a large number of social and environmental issues that investors can use to select investments:
Social and environmental screening allows investors to invest in a manner that is consistent with their values while also assisting them to identify companies that are more profitable and sustainable in the long term. In Canada, the assets and earnings of screened mutual funds and labour sponsored funds are tracked by the Social Investment Organization and available here.