What's the difference between ESG, SRI, and impact investing?

These overlapping terms describe different approaches to values-based investing. SRI, or socially responsible investing, is the oldest and typically uses negative screens to exclude industries like tobacco, guns, or gambling. ESG integrates environmental, social, and governance factors into analysis, often to manage risk rather than purely for ethics, and may not exclude entire sectors. Impact investing goes furthest, deliberately seeking measurable positive outcomes, such as funding renewable energy or affordable housing, alongside a financial return. In practice fund labels blur these lines, so the name tells you less than the methodology. If aligning investments with your values matters to you, read each fund's prospectus and holdings to see whether it merely tilts, actively excludes, or genuinely targets impact. Also weigh the higher fees these strategies usually charge.