1) positive screening means that when socially responsible investors choose fund products, they hope that the fund will only invest in companies that have made positive contributions to society. For example, the fund will only buy shares of companies that value labor relations, environmental protection, product safety and quality, and human rights.
2) Negative screening means that funds avoid investing in companies that endanger society, such as tobacco companies, gambling companies and companies that produce weapons of mass destruction. In the United States, for example, the top five companies most frequently screened by the Fund include tobacco companies, companies that produce alcohol, companies that do not attach importance to labor relations, companies that do not attach importance to environmental protection, and companies that engage in gambling. Companies that value human rights, equal employment opportunities and environmental protection are often favored. With the continuous emergence of corporate scandals, corporate governance, the composition of the board of directors and the degree of information disclosure have gradually become new screening criteria. These socially responsible investment funds, also known as moral funds, can be divided into two types. One is private placement, which is established by private individuals or investment institutions according to their own social environment screening criteria. Its investors include religious groups, government agencies, trade unions, foundations and so on. The other is Public Offering of Fund, which invests in the public and institutional investors.
In the United States, more than 90% of ethics funds are privately owned, the total assets of ethics funds exceed $ 2. 1.4 trillion, and the number of public ethics funds exceeds 200. Shareholder advocacy means that investors who participate in socially responsible investment give full play to their shareholder rights, negotiate with the company, and take actions to influence and correct the company's behavior when necessary, so as to achieve more perfect results in corporate governance and social responsibility. Corporate governance focuses on the company's vote of confidence, the composition of the board of directors, the remuneration of directors and supervisors, severance pay, the incentive mechanism of stock options, and corporate restructuring. Corporate social responsibility includes the disclosure of important information of the company, as well as the company's social responsibility in policies such as environmental protection, labor, race, health and safety. Investors can change the company's decision by talking to the management of the company they invest in, communicating by letter, proposing shareholders' resolutions, and even voting by proxy.
Shareholders advocate the dual-objective trend of attaching importance to corporate governance and corporate social responsibility at the same time, and "sustainable corporate governance" has increasingly become the focus advocated by new shareholders. In addition, social investment institutional investors such as funds, foundations and banks are playing an increasingly active role in advocating shareholders' rights and interests. Community investment means that socially responsible investment funds are mainly invested in communities that are difficult to be covered by traditional financial services. For example, providing financial services for low-income families, providing funds for small and medium-sized enterprises, and providing important community services such as child care, affordable housing and medical care. The funds are basically invested in the following four community development institutions: community development banks, community development loan funds, community development credit cooperatives and community development venture capital funds. Investors can purchase social investment funds and focus on these four types of community development institutions to realize their social responsibilities.
Development and Enlightenment of Social Responsibility Investment in China
Social responsibility investment is still in its infancy in China. In the past 20 years, the economy has been fully developed, and more and more serious environmental and social problems have emerged. People are more and more aware of the importance of corporate social responsibility, so the government has continuously issued some laws and regulations to improve corporate governance, protect the environment, prevent pollution and enhance social morality. The 11th Five-Year Plan places special emphasis on building a sustainable society.