The strategy of investing by avoiding companies deemed to have socially "irresponsible" practices. SR investors typically avoid companies in the tobacco, alcohol, defense and gambling businesses. In addition, companies with poor labor or environmental records are often shunned. Vanguard, bowing to consumer pressure, opened its Social Index fund based on a new index from the Calvert Group, a pioneer in the social indexing business, in 2000. Whether socially responsible indexing actually is a vehicle for social change, or simply a better way to invest has yet to be proven. Only in the late 1990s did SR funds perform well. Before that performance was decidedly lousy.

Also referred to as ethical investing and social investing, this is the practice of aligning a foundation's investment policies with its mission. This may include making program-related investments and refraining from investing in corporations with products or policies inconsistent with the foundation's values.

An investments strategy that only purchases securities of individual companies that espouse some form of social responsibility, e.g., "green" funds that target investments reflecting environmental awareness.