SRI and ESG are Not Interchangeable. Here’s Why We Choose SRI.

SRI investing leaves room for judgment calls that better align with investors’ values. Meanwhile, ESG investing is more vulnerable to companies gaming the system – artificially bumping up their scores with “greenwashing” tactics.

The tops of trees form a heart shape in the sky.
(Image credit: Getty Images)

If you’ve been reading the news lately, you’ve likely heard a lot about ESG (Environmental, Social, Governance) and/or SRI (Sustainable, Responsible and Impact) investing. While the terms are commonly used interchangeably, there are stark differences between the two that every investor should be aware of.

SRI

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up
Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To continue reading this article
please register for free

This is different from signing in to your print subscription


Why am I seeing this? Find out more here

Peter Krull, CSRIC®
Director of Sustainable Investing and Partner, Earth Equity Advisors

Peter Krull is the Partner and Director of Sustainable Investments at Earth Equity Advisors, a Prime Capital Investment Advisors company, and has been specializing in sustainable, responsible and impact (SRI) investing for nearly 20 years. He earned the Chartered SRI Counselor® from the College for Financial Planning and has been a member of the Investopedia 100 list of the most influential financial advisers in America. Peter is a longtime advocate for sustainable, fossil-fuel-free investing, and works hard to educate his clients and the public on greenwashing in the SRI/ESG industry. He is the host of Dollars & Change, a podcast about sustainable and responsible investing, and he believes strongly in the power of positive, solutions-based sustainable investing focused on the economy of tomorrow.