Last week, President Obama and Congress committed US taxpayers to a $787 billion economic stimulus program. Alan Greenspan has told the Financial Times of his qualified support for bank nationalizations, and this week, the US “signaled that it was willing to raise its equity stake” in Citigroup. A giant Swiss bank has admitted to “conspiring to defraud” the IRS and is turning some customer data over to Federal regulators. A recent Newsweek cover even declared, “We Are All Socialists Now.”

Before the fall of 2008, did anyone think it necessary for government to expand its economic role so dramatically? Some observers did, and one – Nobel Prize winning economist Joseph Stiglitz – believes that socially responsible investment (SRI), in concert with better regulation and corporate governance – is essential to broadly shared, sustainable prosperity.

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In his first week in office, President Obama proposed major overhauls of environmental and financial regulations. These changes have long been championed by investors concerned with companies’ environmental, social and governance (ESG) performance, and few were surprised that a new regime has brought a new policy agenda.

In this time of recession and scandal, however, some familiar faces in American business – including former SEC Chairman Harvey Pitt and Wal-Mart’s Lee Scott – are also setting a different tone. Mr. Pitt has announced ten lessons that investors should learn from the current crisis, while Mr. Scott has committed the world’s largest retailer to “a sustainability program to remake the entire company.” These are welcome moves, but ESG investors should ask whether this new attitude will outlast today’s crisis mentality.

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On December 15, President-elect Obama introduced his choice for energy secretary, among other members of his new administration’s environmental policy staff. Echoing his remarks from a recent meeting with Al Gore, the President-elect said that a federal commitment to a “clean energy future” could help shore up the faltering economy.

The effort to mitigate climate change is a massive long-term project, but the political climate typically favors short-term rewards. How could the transition to a less carbon-intensive economy – which would take decades – stimulate spending and hiring today?

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Last week, the annual “SRI in the Rockies” (SRIR) conference brought together leaders from around the sustainable/SRI world. The October 26-29 conference was co-produced by the First Affirmative Action Network and the Social Investment Forum, who have organized SRIR since 1989.

The SRIR website offers free audio and PowerPoint files from the event’s forums and presentations, including:

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N.B.: The following Q&A is based on a recent exchange between an Australian business reporter and Peter Kinder, President of KLD Research & Analytics.

Socially responsible investors believe businesses must incorporate environmental, social and governance (ESG) factors into their management strategies.

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Last week’s Ceres conference included a panel on water scarcity and risk. The term “peak water” was mentioned, framing water as a commodity facing a peak in availability (like oil) and a potentially tradable value, similar to carbon.

Panelists identified water scarcity as a human rights and community issue as much as an environmental issue. Chris Williams of the World Wildlife Fund reported that over 1 billion people globally have no access to safe drinking water.

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