Socially Responsible Investments are investments that consist only of shares of companies deemed to have environmentally and socially sound practices. The exact criteria determining how companies are chosen for the investment differ slightly with each investment house; however, it would normally include companies that are certified to the environmental standard ISO 14000, with fair working conditions for employees and proper controls against pollution.

Investing in a fund is investing in a pool of shares. When you invest money into funds, it is not always obvious exactly what you are investing in. Choosing a fund to invest your savings into is a difficult choice and many of us will just choose the fund that performs the best, not realising that this could mean investing into unfavourable industries such as military, tobacco and gambling or supporting companies that are destroying rainforests or using child labour. By investing your savings into a Socially Responsible Investment you can rest assured that your money is not supporting companies which are have detrimental environmental or social affects.

There is a common misconception that investing in an ethical or socially responsible fund means a sacrifice in performance. This is not so, good environmental and social practices are often associated with good general management and therefore the companies adopting these practices are expected to grow in value over the long term, and therefore, so will the SRI that invests in these companies.

Singaporeans wishing to invest their money ethically have limited options in Singapore. Indeed, many providers offering SRI elsewhere do not offer it here. The current providers in Singapore are Morley Fund Management, United Overseas Bank and the Asia Carbon Fund. However, in a recent survey conducted by PAIA we found that 92% of those surveyed would be interested in investing in SRI in the future. We also discovered that only 46% of those surveyed knew that SRI existed. Some people that were questioned showed real commitment to the environment, with 31% saying they would be prepared to sacrifice performance to invest in a SRI fund rather than a conventional one and a further 35% were willing to depending on the extent. As shown by our results, there is clearly an interest in SRI in Singapore and the necessary demand to tempt other investment houses to offer SRI here.

PAIA is not only working on raising the profile of SRI in Singapore (through surveys, press articles and meetings with financial institutions), but is looking to work alongside fund managers to help set criteria for companies suitable for inclusion in SRI funds. We authored a study of the SRI market in Singapore for the Association of Sustainable and Responsible Investments in Asia (ASrIA) which is available on their website.