 Hey guys, it's MJ, the student secretary, and in this video I want to quickly explain SRI. Now this is quite relevant seeing that YouTube itself is going through a little bit of an SRI crisis around the boycotting of ads, around hate speech videos. But let's start off with a definition. SRI is any issue that may not have a short term impact, but could have a significant negative or positive impact for asset owners in the long term. So what I want you to take away from that is that it's long term focused and there is a big financial impact, and this is probably the most important part, is that it's a moral judgment and an investment judgment. A lot of people think that SRI, it's either we're going to go for investing in the right thing or we're going to be investing in what's profitable. But SRI says it must be both profitable and sustainable. Now SRI can be divided into three broad groups, environment, social, and governance. And what I want to do for the rest of this video is just go through each of these three. So let's look at environment. What do we mean by environment? Well, we want to look at investing in companies that have got a good recycling policy, that have a low carbon footprint, and that are protecting the ecosystem. Why? Because in the long term they might get a massive legal case that sues them and absolutely decimates their balance sheet. And also we don't want to stuff up the earth with global warming and climate change and all of that type of stuff. Okay, next let's look at social. Social, it's positive for the community. So this means no tobacco shares, alcohol shares are very risky, gambling shares, pornography, all of those things are seen as negative for the community. In the companies they need to have a safe work environment and good labor laws and they also need to treat customers fairly. Again, one of the big massive risks that could come across from them not doing this is a big legal case suing them for millions and millions of dollars for doing something wrong for killing someone or someone dying on their job or someone dying from using the product. You know, there is massive consequences for that. And then finally I want to quickly look at governance. What do we mean by governance? Governance is how is the company structured, who controls it? Essentially you want the CEO and the chairman to be separate. This is just to dissolve the fact that too much power might be on an individual. What you also want is that they welcome board voting from outside shareholders to make sure that their incentives are aligned and we want to see transparency when it comes to reporting, making sure that they're disclosing all the things that they're doing. There's a little sneaky sneaky backdoor deals going on, bribery and all that type of stuff. And basically in a nutshell, SRI, it's all about capitalism and it's the whole idea that capitalism can be good. And the message is to only invest in companies doing the right thing. Now this can get a little bit confusing in what is the right thing, especially around say like an alcohol producing company, you know, there is a little bit of gray area, but generally you should be able to tell when something is right and when something is wrong because as actuaries we should have developed, you know, the ability of discernment. But essentially that is SRI. Quickly explained. If you have any questions, let me know in the comment section below. Thanks guys. Cheers.