What’s the difference between sustainable investing, socially-responsible investing, and impact investing?

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Sometimes all these terms are used interchangeably, but at Aspiration we see them as fundamentally different. “Sustainability” can be used as an umbrella for some very different strategies.

Socially responsible investing – often known by the acronym “SRI” – is the granddaddy of sustainable investing and still accounts for about 60% of sustainable investments. Socially responsible investing focuses on letting you invest without holding your nose by stripping out investments in areas that conflict with your own values, including alcohol, tobacco, firearms, gambling, or fossil fuels - but this “negative screen” often results in lower returns.

Impact investing” – moves beyond “don’t do bad” to “do good.” The primary goal with impact investing is to make a positive difference in the world.

ESG investing– what we at Aspiration call “High Road investing” – means looking at companies that take materially significant environmental, social, and governance actions, not out of the kindness of their heart, but because they lead to greater long term growth.

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