SRI practices often involve excluding investments affiliated with geographic conflicts or operating in sin stock industries. Which option best describes this approach?

SRI practices often involve excluding investments affiliated with geographic conflicts or operating in sin stock industries. Which option best describes this approach?

• A. Exclusionary screening
• B. Socially responsible investing
• C. Values-based screen
• D. Positive screening

Answer: (A)

Exclusionary screening centers on intentionally removing investments that don’t meet ethical or social criteria. By excluding assets tied to geographic conflicts or “sin stock” industries, the investor is applying a negative filter to ensure the portfolio avoids areas that conflict with their values. This is distinct from positive screening, which looks to add investments that meet favorable criteria, and from the broader umbrella of socially responsible investing, which includes multiple approaches. Values-based screening is related, but the emphasis here is on the act of removing certain investments, which is the hallmark of exclusionary screening.

Exclusionary screening centers on intentionally removing investments that don’t meet ethical or social criteria. By excluding assets tied to geographic conflicts or “sin stock” industries, the investor is applying a negative filter to ensure the portfolio avoids areas that conflict with their values. This is distinct from positive screening, which looks to add investments that meet favorable criteria, and from the broader umbrella of socially responsible investing, which includes multiple approaches. Values-based screening is related, but the emphasis here is on the act of removing certain investments, which is the hallmark of exclusionary screening.