The Responsible Investing Landscape: From SRI through ESG to IMPACT Case Study Solution


The landscape of responsible investing has evolved significantly over the years, transitioning from Socially Responsible Investing (SRI) to Environmental, Social, and Governance (ESG) criteria, and now encompassing Impact Investing. The shift in focus from purely financial gains to ethical and sustainable considerations presents both opportunities and challenges for investors and organizations. In this context, the case presented by Fabrizio Ferraro and Richa Pathak explores the complexities and nuances of responsible investing, shedding light on the varied strategies employed by firms to align their investments with ethical values and societal impact.

Case Issue

The central issue in this case revolves around the multi-faceted nature of responsible investing. Firms and investors are faced with the challenge of navigating through different approaches, namely SRI, ESG, and Impact Investing, each with its unique set of criteria and objectives. The dilemma lies in choosing the most suitable approach that aligns with the organization’s values while ensuring financial sustainability and positive societal outcomes.

Case Analysis

Socially Responsible Investing focuses on excluding or including investments based on ethical guidelines. Investors following this approach avoid companies involved in activities such as tobacco, alcohol, or weapons production. While this method aligns with moral values, its financial impact may not be significant due to limited diversification.

Environmental, Social, and Governance criteria assess a company’s impact on the environment, society, and corporate governance, respectively. ESG investing emphasizes the integration of these factors into investment decisions. Companies with strong ESG performance are believed to be more sustainable and less risky in the long run, attracting investors seeking both profit and positive societal contributions.

Impact Investing

Impact Investing takes a proactive approach, emphasizing investments in organizations and projects that generate measurable social and environmental impact. Unlike SRI and ESG, impact investing focuses on intentional, positive change, aiming to address specific societal challenges such as climate change, poverty, or healthcare disparities. This approach provides investors with a tangible way to contribute to positive change while generating financial returns.


The responsible investing landscape has significantly broadened, offering investors a spectrum of choices to align their portfolios with their values. From avoiding morally questionable investments to actively seeking positive societal impact, the evolution from SRI to ESG and Impact Investing represents a paradigm shift in the financial industry. Investors are now better equipped to contribute meaningfully to causes they care about while enjoying potential financial gains.

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Diversification: Investors should diversify their portfolios even within responsible investments. Diversification remains a key strategy to mitigate risks and enhance long-term sustainability.

Due Diligence: Thorough research into companies and funds is crucial. Investors should assess the authenticity of ESG claims and the actual impact of companies involved in impact investing projects.

Active Engagement: Investors can actively engage with companies they invest in, encouraging them to adopt responsible practices. Shareholder activism can drive positive change within corporations.

Long-Term Vision: Responsible investing often yields long-term benefits. Investors should adopt a patient approach, understanding that societal and environmental impacts might take time to manifest fully.

Collaboration: Collaboration with organizations, NGOs, and governmental bodies can enhance the impact of responsible investing. Investors should explore partnerships that amplify their efforts in addressing pressing global challenges.

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