Quick Definition

Social responsibility in finance refers to the practice of making investment decisions that consider not only financial returns but also social, environmental, and ethical factors.

Examples

• 1Investing in companies that prioritize sustainable practices, such as renewable energy firms.
• 2Avoiding investments in industries that are harmful to the environment, like fossil fuels.
• 3Supporting businesses that have strong labor rights and fair trade practices.
• 4Choosing funds or portfolios that are labeled as socially responsible or ESG (Environmental, Social, Governance) compliant.

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