The modern roots of SRI can be traced to the sixties and the Vietnam War. Investors wanted to avoid companies that engaged in the production of napalm. In the eighties socially concerned investors focused investment strategies on pressuring the government of South Africa to dismantle its racist system of apartheid. Today, many are concerned about global warming, ozone depletion, corporate governance issues, workplace diversity, human rights, indigenous rights, equality in the workplace, etc., etc.

"Socially responsible investing" can mean very different things to different people. It is important to understand that there are no "perfect" companies. What SRI hopes to do is to identify better-managed companies.

There are three components to socially responsible investing. Passive SRI can be accomplished by "screening" either to eliminate particular companies or to include companies that do something particularly well. A more active approach to SRI involves shareholder advocacy which involves engaging in dialogue with companies and submitting and voting on shareholder resolutions. "Community investing" provides capital to people in low-income, at-risk communities who have difficulty accessing it through conventional channels. Many SRI investors commit a small portion of their portfolios to community development financial institutions (CDFIs) that work to eliminate poverty, create jobs, and provide affordable housing and small business development financing in disadvantaged communities.