The concept of socially responsible investment is not new. The roots of what has become known as socially responsible investing go back to ancient times. The Old Testament laid down many commands about how to invest ethically. Similarly, the Quran also spells clear instructions about ethical investment. There is a general agreement that current consciousness of ethical investment or socially responsible investment was developed with the Quaker and Methodist religious movements in the 19th Century. Later on, in 1928, Philip L. Carrot initiated Pioneer Fund— the earliest SRI fund initiated in the United States.
This fund is still operating(Social Funds, 2010). The first SRI fund in the United Kingdom was the Friends Provident Stewardship Fund which was started in 1984 (Ali and Gold, 2002)The political scenario of the 1960s helped in raising awareness around issues of social responsibility (Schueth, 2003). This decade marked a series of social and environmental movements which emphasized civil rights and women’ s rights on one hand and on the other, these movements raised their voice against humans’ catastrophes in wars. Later on, the human rights movement broadened the scope of the SRI to the management and labor issues.
These concerns also included an anti-nuclear sentiment. Such movements and sentiments compelled the investors to think about their priorities in investing in anti-social businesses like drugs, and weapons manufacturing. Thus in the late 1970s, the considerably larger group of American investors began to incorporate the concept of social investing into their international business approach (Pan and Mardfin, 2001). Such groups of businessmen showed their concerns about the racist systems of apartheid in South Africa. Consequently, international investors joined international human rights activists’ efforts to put economic pressure on South Africa to end apartheid.
Those investors, during the 1970s and 1980s, used both screening and shareholder advocacy (activism) to press for change in South Africa.
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