NEW YORK (TheStreet) -- "Socially responsible investing is an approach to investing that incorporates and integrates extra financial data into the investment decision-making process," said Scott Arnell, founding partner of Geneva Capital.

In some cases that extra financial data is referred to as "exclusion" or the screening out of companies that are harmful to the world. Those companies may include tobacco companies, those that work with corrupt governments or those that produce cluster munition or land mines. 

Sometimes socially responsible investing -- or SRI -- comes in the form of "impact investing." These types of investments are where investors look directly to allocate money toward companies that are benefiting or improving the economical or socio-economical conditions. 

This may include companies that develop and build houses for low-income families or companies that promote fair trade coffee, Arnell explained. 

Whether it's through exclusion or impact investing, the objective always remains the same: Achieve competitive or superior market returns while advancing the values of the investor, he said. 

The SRI approach continues to garner strength. Industry assets under management have grown between 11% to 52% over the past several years.  

Arnell thinks SRI investing can pay off in the long term. Companies that are socially responsible tend to be better managed and so tend to outperform companies with subpar management teams, he concluded. 

-- Written by Bret Kenwell

Follow @BretKenwell

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