SRI in Your Investment Strategy

Will SRI really be an important investment strategy in the future?

Investment StrategyMore and more people are showing interest and getting involved in the global sustainability movement, with solutions and enormous growth building a strong case for socially responsible investing (SRI). A popular theme in the world of financial planning now revolves around one’s investment strategy reflecting his or her individual values. And, the millennial generation – a quickly growing group of investors – is particularly interested in sustainable, responsible investment options according to recent surveys.

So how and why is socially responsible investing becoming a popular investment strategy in today’s world? Well, for starters, math paints a picture of what is to come regarding resources and population. A recent United Nations study shared that in the year 2050, our planet will be considered home to 2 billion additional people. This figure will bring the population to over 9 billion, all seeking ways to survive, support themselves, and flourish despite limited resources. Because of this need to adequately provide for the population, sectors such as energy, agriculture, water, metals, forestry and health are key in sustainability-related investments.

Let’s take a look at some additional eye-opening statistics related to resources and sustainability:

  • According to the United Nations report, World Agriculture Towards 2030/2050, there will be a 35 % increase in the worldwide requirement for food by 2030.
  • The Technological Forecasting and Social Change report that studied long-term global water projections found a 40 % increase in water demand, and 50% rise in energy demand by the year 2030.

With these statistics, it is believed that companies whose mission focuses on meeting these food, energy, and water challenges and demands will be among the best situated for long-standing growth. However, even highlighting some of the above-mentioned statistics, some investors have apprehensions regarding socially responsible investments. A common misconception is these types of investments bring about a lower rate of return. But recent studies by Oxford University and Morgan Stanley suggest otherwise. Here are some of the specific findings:

  • When over 10,000 mutual funds were studied, sustainable, socially responsible funds either met or surpassed median returns of conventional equity funds during 64 percent of the specific time frames that were researched.
  • In addition, a seven-year period of analysis from 2008 – 2014 showed that socially responsible funds met or surpassed median returns in five of six equity classes that were studied.

Because of growing interest in these types of investment strategies, it is crucial for financial planning advisors to help clients have their personal preferences echoed in their investment portfolios. Speak to your clients regarding what socially responsible, sustainable investing means to them. Where one client might be passionately focused on companies meeting environmental challenges, another may be interested in social issues. Be sure to also discuss any investment risks that may come along with values-driven investment strategy.


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Summit Brokerage Services is part of Cetera Financial Group. Summit Brokerage provides a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance through its subsidiary, SBS Insurance Agency of Florida. Summit Brokerage also provides asset management services through its investment advisor, Summit Financial Group, Inc.


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Cetera Financial Group® (“Cetera”) is a leading network of independent retail broker-dealers empowering the delivery of objective financial planning advice to individuals, families and company retirement plans across the country through trusted financial advisors and financial institutions.  Cetera is the second-largest independent financial advisor network in the nation by number of advisors, as well as a leading provider of retail services to the investment programs of banks and credit unions.

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