Socially responsible investing is making investment decisions with consideration of social and ethical issues as part of the determination process. Investor decisions typically have goals of income, capital gains, and/or preservation of capital. Socially responsible investing adds to the decision- making process consideration of issues and concerns such as the environment, military spending, nuclear waste, and tobacco.
Many groups have implemented the concept of socially responsible investing. Churches and universities have long applied what is known as the “sin screen”—no investments in companies that are engaged in tobacco, liquor, or gambling. Opposition to the Vietnam War in the 1960s and early 1970s increased interest among investors concerned with weapons production. Television coverage of the use of defoliants designed to kill vegetation and napalm, a chemical dropped from planes during the war to ignite fires, often burning people, stirred the consciousness of many Americans, including investors. In the 1970s, opposition to companies doing business in apartheid-practicing South Africa expanded efforts toward socially responsible investing. multinational corporations (MNCs) came under scrutiny for their investments in South Africa, pressuring many companies to withdraw from the country. Multilateral coordination lead to the creation of the Sullivan Rule, guiding international investment in South Africa. Rev. Leon Sullivan, an American Southern Baptist minister, while on the board of General Motors in 1976, authorized the Sullivan Principles in 1977 as a means for US corporations to bring change while doing business in South Africa. He called for a code of ethics, and his work set the standard for nondiscriminatory employment practices in South Africa under apartheid.
The California Public Employees’ Retirement System (CALPERS), the largest state pension fund in the country, uses “basic democratic principles” as part of its international investment guidelines. These guidelines cover such issues as labor standards, political stability, and corporate disclosure. In 2002, CALPERS withdrew investments from Indonesia, Malaysia, the Philippines, and Thailand citing financial and political factors. The fund already does not invest in China, Russia, Pakistan, Venezuela, and 10 other countries.
By the mid-1990s, socially responsible investing expanded from a few firms to over 100 mutual funds allocating approximately $1 trillion. Proponents of traditional investment decision making deride those who practice socially responsible investing as a liberal fringe group. Critics of capitalism contend that socially responsible investing is “participation in capitalism made to feel good.”
Two methods or standards for socially responsible investing are offered by goodmoney.com and moneyandvalues. com. Ethicalinvesting.com suggests there are three basic values shared by most people.

• Avoid causing, illness disease and death.
  
• Avoid destroying or damaging the environment.
  
• Avoid treating honest people with disrespect.

Using these criteria, it is argued that no ethical person would invest in companies doing business with a drug cartel or tobacco companies because these firms contribute to illness and death. Similarly, companies that produce chemicals harmful to the environment and companies that take advantage of consumers by deceiving people with dangerous or poor-quality products should be shunned. Ethicalinvesting. com suggests Multinational Monitor and Mother Jones Magazine as sources of information to help socially responsible investors evaluate companies.
Moneyandvalues.com offers a unique service to socially responsible investors. At this website, viewers check which issues they want to “screen” for and then input the names of mutual funds to evaluate. Viewers can screen for tobacco, same-sex lifestyle, pornography, nuclear power, gambling, environment, defense contracting, alcohol, affirmative action, and abortion. The site then reports investments made by specified mutual funds in companies engaged in each category of activity. In the cases of environment and affirmative action, the site reports on companies that have poor records or lack policies regarding these issues.
To describe the status of socially responsible investing in the United States, Dr. Ritchie Lowry, professor of sociology at Boston College, quotes the German philosopher Arthur Schopenhauer: “There are three steps in the revelation of any truth: in the first, it is ridiculed; in the second, resisted; in the third, it is considered self-evident.” Dr. Lowry contends socially responsible investing is now between the second and third steps.