Corporate social responsibility has become an established feature of the landscape in democratic, free-market countries. Companies pursuing CSR declare their allegiance to principles of sustainable growth, respect for the environment, initiatives to support employees’ personal growth and local communities, and application of best practices in corporate governance. For nearly a decade the concept of CSR has been joined by the idea of SRI—“socially responsible investment” or “sustainable and responsible investment.”

While CSR is an attribute of companies, SRI applies primarily to institutional investors—brokerages, investment funds, pension funds, and asset-management firms. The general guideline of SRI is to reflect in analysis and investment decisions not only hard financial results, but to an equal degree factors connected with ecology, social development and corporate governance—grouped together under the label ESG (environmental, social, governance ).

Funds that base their investment principles on ESG criteria or focus on investing in the securities of companies perceived as socially responsible have become known as “ethical funds.” As shown by the table below, the value of “responsible investments” in Europe, which is the global leader in SRI, grew by a factor of over 2.7 times between 2009 and 2013.

But SRI is still a marginal phenomenon in Poland. According to a survey in 2012 by Deloitte and the Warsaw Stock Exchange, 78% of respondents from institutional investors believe that taking ESG factors into account in the firm’s investment strategy will have a positive impact on the company’s financial results. Nonetheless, 87% of the respondents admitted that they do not consider these factors when making investment decisions.

Overview of SRI strategy

• Sustainability-Themed Investment:investment analysis primarily focused on ESG factors
• Best-in-Class Investment Selection: selection of the most promising investment options, for example in a given industry, and analysis of options in terms of ESG factors
• Norms-based Screening: analysis of investment options in the context of the degree of compliance with international environmental, social and governance standards
• Exclusion: excluding investment options in industries, countries or companies regarded as unethical, such as the tobacco industry, weapons manufacturers, or pharmaceutical companies performing animal testing
• Integration of ESG factors in Financial Analysis: explicit inclusion of ESG factors in classic financial analysis tools
• Engagement and Voting on Sustainability: evaluation of the level of commitment of corporate authorities and shareholders in promoting strategies reflecting ESG factors