The Global Expansion of SRI: Facing Challenges, Meeting Potential


  • Elizabeth Umlas

    1. is an independent researcher and consultant based in Geneva, Switzerland. Her current work focuses on supply chain labour rights and the evaluation of corporate impact on human rights. From 2001 to 2007, she was senior research analyst for human rights and labour rights at KLD Research & Analytics, a US-based social investment research firm.
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Socially responsible investment (SRI) has long been a strategy for aligning values with investing, through the incorporation of environmental, social and corporate governance factors into investment decision making. Until recently, it has been considered a niche market, and is well developed in only a few countries. Yet SRI seems poised to expand greatly, as mainstream investors look to it with increasing interest, and investors in both the global north and south begin to apply SRI concepts in developing country markets. SRI is under significant pressure from these developments, which could dilute its strengths and hamper its ability to harness investment for social change. This article argues that there are several sources of relatively untapped potential that SRI can and must exploit, not only to survive these challenges and address its own weaknesses, but to succeed in changing corporate behaviour. Given growing concern about the impact of corporations on society in a globalizing world, and given SRI's potential role in influencing this impact, developing countries should be particularly interested in how SRI fares in the coming years.