In finance theory and practice, the avowed purpose of all investments is to earn and maximize returns. The corollary to earning returns is the risk associated with it; hence, simply put, investing deals with the return-risk trade-off. The profit-maximization principle of business has often tended to isolate its activities and outcomes such that they seem unconcerned with the impacts they have on society as a whole and on the natural environment. Growing realization in recent years about the impacts and inalienable relationship that business has with society and environment has brought a paradigm shift in the way its objectives are perceived and shaped. The "triple bottom line" reporting alludes to this new approach where business performance is evaluated along three closely-related lines—economic, social and environmental. Such an evaluation process posits a business organization as a holistic entity in society, in sharp contrast to its earlier one-dimensional existence as a "profit-making machine".
When applied to the investment decision-making process, the triple bottom line approach is referred to as "socially responsible investing". According to the Social Investment Forum (US), Socially Responsible Investing (SRI) "is an investment process that considers the social and environmental consequences of investments, both positive and negative, within the context of rigorous financial analysis." The European Sustainable and Responsible Investment Forum (Eurosif) says, "Socially Responsible Investment combines investors' financial objectives with their concerns about Social, Environmental, Ethical (SEE) and corporate governance issues."
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