History of Socially Responsible Investing

A Brief History

The origins of what has become known as socially responsible investing date back to ancient times. In Biblical times, Jewish law laid down many directives about how to invest ethically.

Religious investors whose traditions embrace peace and nonviolence have avoided investing in enterprises that profit from products designed to enslave or kill fellow human beings. The Quakers have never condoned investing in slavery or war and Methodists have been managing money in the U.S. using what are now referred to as “social screens” for over two hundred years! And Islamic tradition prohibits investing in companies charging interest.

The modern roots of SRI can be traced to the impassioned political climate of the 1960s. During that tumultuous decade, a series of movements changed the nation’s consciousness about the issues of social responsibility and accountability. Concerns regarding the Vietnam War, civil rights, and equality for women were broadened during the 1970s to include disarmament, fair labor, and the environment.

The ranks of socially concerned investors grew dramatically throughout the 1980s as millions of people, churches, universities, cities, and states focused investment strategies on pressuring the white minority government of South Africa to dismantle its racist system of apartheid.

Then, with the Bhopal, Chernobyl, and Exxon Valdez incidents and new information about the crisis of global warming, the environment moved to the forefront of the minds of socially concerned investors. Millions of people began embracing the concept of SRI. Mutual funds and money managers arose to help investors channel their capital toward enterprises that contribute to a sustainable environment and a just world.