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The phrase "social responsibility" refers to a person's or an organization's ethical or moral duty to behave in society's best interests. It alludes to the notion that organizations and people have an obligation to act in ways that advance society at large rather than merely their personal self-interest.
Investing in businesses that place a high priority on social and environmental issues, such as sustainability and ethical labor practices, is referred to as "social responsibility" in the financial context. SRI or sustainable investing are two terms used to describe this form of investing.
Since corporations and investors are pushed to higher standards of ethical behavior by consumers and regulators alike, social responsibility is becoming more and more recognized as a significant factor in business and investing decisions. Businesses that prioritize social and environmental concerns are more likely to attract devoted clients and staff, as well as favorable perceptions from regulators and other stakeholders, according to proponents of social responsibility.
However, some who oppose social responsibility contend that it can be challenging to quantify how these behaviors affect financial performance and that organizations that place a high priority on social responsibility may forgo immediate financial success in the process. The maximization of shareholder value is also asserted to be the only objective that firms should have, as opposed to undertaking more extensive societal obligations.
