The financial and reputational risk that BP has suffered over the oil spill in the Gulf of Mexico in 2010 has meant that some investors are thinking more carefully about where their money is actually invested. The arrogance of the BP executive that this could never happen and even if it did BP would respond well has had a direct impact on their profits and dividends. No longer on the fringes of investment, SRI (socially responsible investment) offers the ability to screen investments from unsavoury company behaviours. Avoiding BP would have given a financial advantage to any fund with appropriate screening in place.

Corporate social responsibility was regarded as a fad when first introduced. Now no company can afford to ignore its impact both in terms of PR and financial considerations. Investors increasingly ask "difficult" questions and demand responses.

The size of the SRI market is now £7 billion, significantly up from £1.5 billion 10 years ago (EIRiS). This demonstrates increasingly that investors want more control over where their money is placed.

SRI covers a broad range of different funds from those which apply high levels of screening to those involved with engaging with companies to improve practices. Each fund sets out its purpose and objectives that is clear for investors to see. The degree of engagement and involvement that unit holders feel means that the money is "stickier" and remains invested for longer, even through bad investment periods.

The comparable performance of SRI and non-SRI funds is rarely an issue as good and sustainable returns can be obtained from SRI funds. Indeed the additional level of research applied means that unsavoury practices are often uncovered that in turn leads to companies being excluded for financial as well as ethical reasons.

There is however a correlation between a high degree of screening and volatility. So care needs to be exercised to match risk tolerance with ethical objectives.

For an investor, SRI funds can be used in pensions, SIPPs, ISAs as well as direct investments.

For the more adventurous, SRI can offer forestry funds, alternative energy investments, microfinance funds and even green oil funds. The choice is prolific and expanding.