What is socially responsible investing?

Socially Responsible Investing portfolios are designed to help you express your values and social ideals through your investments. Despite the various limitations that SRI portfolios face today, Betterment wants to support its customers in meeting their desires for more socially responsible vehicles for investing.

Our approach to SRI has three fundamental dimensions:

  1. Reducing exposure to investments involved in non-socially responsible activities and environmental, social, or governmental controversies.
  2. Increasing exposure to investments that work to address solutions for core environmental and social challenges in measurable ways.
  3. Allocating to investments that use shareholder engagement tools, such as shareholder proposals and proxy voting, to incentivize socially responsible corporate behavior.

We first define our SRI approach using a set of industry criteria known as ESG, which stands for Environmental, Social and Governance, and then expand upon the ESG-investing framework with complementary shareholder engagement tools.

To learn more about how we built our SRI portfolios, review our SRI article.