In Socially Responsible Investing (SRI), negative screening and positive screening are two common strategies used to align investments with ethical, social, and environmental values. While both approaches focus on selecting companies based on specific criteria, they differ in how they are applied.

Negative screening involves excluding certain industries, companies, or practices that do not align with an investor’s values or ethical standards. For example, many SRI investors avoid businesses involved in tobacco, gambling, weapons, fossil fuels, or companies with poor labour practices. The goal is to eliminate exposure to organisations whose activities are seen as harmful to society or the environment. This approach helps investors avoid supporting industries that conflict with their personal or institutional principles.

Positive screening, on the other hand, actively seeks out companies that demonstrate strong performance in Environmental, Social, and Governance (ESG) areas. Instead of focusing only on exclusion, this method rewards businesses that promote renewable energy, gender equality, fair labour standards, or community development. Positive screening encourages capital to flow toward organisations making a measurable positive impact, often supporting innovation and sustainable business models.

The key difference lies in the approach: negative screening removes harmful options, while positive screening highlights and supports beneficial ones. Many investors combine both strategies, aiming to avoid unethical practices while encouraging companies that contribute to long-term sustainability and social good.