Sustainable investing is a comprehensive term that encompasses values-based, ethical, socially responsible (SRI), Environmental, Social & Governance (ESG), impact investing, and other approaches. Think of sustainable investing as an investment philosophy or guiding strategy that employs many different tactics including divestment; screening investments (mutual funds, stocks, ETFs, fixed income, or cash instruments) for environmental, social, and governance impacts; investing in B Corps; investing in community banks; and investing in for-profit social ventures.
Though its tactics may vary, sustainable investing on the whole is based upon the conviction that we must take the long view when deciding what companies or funds to invest in. Investing in fossil fuel companies will have one kind of long-term impact, and investing in alternative energy will have another.
Socially responsible investors often share the belief that investment strategies that do not take future generations into account can perpetuate business practices that are harmful to people and planet.