Socially responsible investing (SRI) avoids investing in companies and industries that run contrary to an investor’s specific set of values. Back in the mid-1900s, SRI came into play with the notion of eliminating “sin stocks”—those related to alcohol, tobacco, or gambling—from investment consideration, as some viewed them as morally objectionable. You can still exclude or screen out certain industries that don’t align with your values, but the field has expanded to a broader focus on the more inclusionary environmental, societal, and governance (ESG) investing which considers those criteria to help achieve holistic financial objectives.

Put another way, SRI allows an investor to align their principles with their portfolios—to do good while also aiming to do well from a financial standpoint. Today, in addition to looking at a company’s balance sheet, one can look at whether its hiring practices are equitable, whether it promotes diversity, the degree to which it’s seeking to reduce its carbon footprint, etc.