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Glossary of Socially Responsible Investing Terms by Category
General Terminology
Corporate Social Responsibility (CSR)The integration of business operations and values whereby the interests of all stakeholders including customers, employees, investors, and the environment are reflected in the company's policies and actions.
Double Bottom LineRefers to a balance between a company's social and financial return.
Social Venture CapitalFunds raised to support economic ventures with a focus or mission involving the improvement of society.
StakeholderAnyone who is affected by or who has an affect on an organization.
Triple Bottom LineRefers to a balance between a company's social, environmental, and financial return.
Community Investing    to top
Affordable Housing Initiativescommunity lending used to build or rehabilitate housing for low-income families. Loans are usually accompanied by supportive programs helping individuals secure and repay mortgages.
Community BanksFor-profit, insured banks or savings institutions that target low-income people or others who lack adequate access to financial services. Given the typically low to moderate-income customer base of development banks, they often depend on additional deposits from outside of the community to fund their lending activity.
Community DevelopmentLending supports non-profits and cooperatives that are working directly with disadvantaged populations and communities to develop enterprises that provide core social resources, such as health services and daycare centers.
Community Development Financial Institution (CDFI)Community banks, credit unions, loan funds, and microcredit institutions.
Community Development Loan Fund (CDLF)A non-profit organization providing loans to underserved communities at below market rates for affordable housing, small businesses, and community facilities.
Community InvestingInvestment programs, which support development initiatives in economically challenged communities through community-based financial institutions such as development banks, loan funds, and community credit unions.
Cooperative LendingA group of microentrepreneurs form a cooperative whereby the group disburses loans to members and each member has ownership for the ventures.
Informal SectorNon-registered, but legal enterprises or under-the-table businesses such as street vendors and babysitters.
MicrocreditSmall, low interest loans to low-income entrepreneurs who have little or no collateral.
Microfinance InstitutionsOrganizations that provide small amounts of capital, often as little as $50 in developing countries, to people with little or no collateral so they can avoid usurious rates. Also gaining recognition in U.S. communities as well, although micro-loan amounts are considerably higher there.
Peer Lending GroupsA group of microentrepreneurs who receive formal loans typically through an intermediary such as a non-profit organization. Group accountability ensures successful loan repayment and members gain access to credit.
Revolving Loan FundWithin a group of microentrepreneurs, a loan is made and must be paid back in full before a second loan is granted to another member of the group. In some cases group members will provide the funds rather than an outside funding source.
Small Business DevelopmentThis category of lending assists low-income people in disadvantaged communities to start or increase the scope of their own businesses by providing loans generally over $25,000.
Social InvestingThe act of making investment decisions to achieve social as well as a financial return.
Shareholder Activism    to top
Corporate GovernanceThe balance of power within corporations that determines who controls company policy among the Board of Directors, corporate executives, and shareholders, and often challenged by the latter through shareholder activism.
DivestmentDiscontinuing investment in a corporation because of social concerns.
Proxy BallotUsed in voting on shareholder resolutions. All proxies not submitted are considered in accordance with management's recommendations.
Shareholder ActivismInvestor efforts to submit and vote proxy resolutions as a means of influencing company behavior.
Shareholder ResolutionsMethod by which stakeholders attempt to change corporate policies and practices.
Social Screening    to top
Affirmative ScreeningThe act of investing in companies with values aligned with your own. Examples include investments in companies with good minority hiring records, good environmental records, or good community relations.
Best of ClassA positive approach to screening employed by some mutual funds and money managers, which includes the social and environmental leaders among each industry, even those with many challenges such as the oil industry.
Child LaborEmployment of children, generally under the age of 15 or below the compulsory schooling age, often under hazardous or harmful working conditions and at the cost of the children's physical, educational, and psychological development.
Exclusionary (negative) ScreenAn ethical criteria that may disqualify companies for consideration of investment.
IndexA means of measuring the performance of a financial market or a sector of a market by calculating the prices of its constituents.
ProspectusA document that contains complete information detailing the financial condition of a fund, including management fees and expenses.
ScreeningThe inclusion or exclusion of corporate securities in investment portfolios.
Social AuditingThe process whereby an organization can account for its social performance, report on and improve their performance. It assesses the social impact and ethical behavior of an organization in relation to its aims and those of its stakeholders.
SweatshopsProduction factories often marked by low wages, inadequate working conditions, overcrowding, poor health conditions, and long hours.
Vendor StandardsWorkplace and human rights standards employed by corporations to assure that their products provided by supplier factories overseas are not tainted by sweatshop conditions, child labor, or other labor abuses.

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