The Social Investment Forum has posted a list of thoughtful answers to the “Top 10 Questions about SRI.” I especially like SIF’s responses to some skeptical questions about our industry, such as:
Is the performance of SRI funds competitive with mainstream funds and with their benchmarks?
Last week, Investors Against Genocide (IAG) announced that Vanguard will now screen its funds’ constituents for human rights practices – including companies’ involvement with the government of Sudan. Vanguard says that its new policy, which applies to all 157 of its funds, is “substantially identical” to IAG’s shareholder proxy proposals.
“While the SRI mutual fund industry has had policies like this in place for decades, I know of few mainstream firms which have such a clear and explicit human rights policy,” Walden Asset Management’s Tim Smith told the Social Investment Forum.
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.
On November 26th, the Secretariat of the United Nations Principles for Responsible Investment (PRI) held a webinar on its Ethical Trading Initiative. The PRI call on investors to incorporate environmental, social and governance (ESG) factors into their investment practices, and to work together for better reporting and disclosure of ESG performance. (KLD is a charter signatory of the PRI. For more information, see the About PRI page at KLD.com.)
The Ethical Trading Initiative is a PRI-led coalition that works for better labor and environmental practices throughout the global supply chain. The Initiative is a recognition that investors alone cannot raise global ESG standards. Real progress demands that manufacturers, distributors and retailers commit to industrywide improvements. Shareholder activists play a vital role in this effort, which requires coordination on a massive global scale.
Environmental Finance is a British magazine that covers “the ever-increasing impact of environmental issues on the lending, insurance, investment and trading decisions affecting industry.” Contributors include environmental and business writers, and also experts in the field – including KLD President Peter Kinder.
The September issue [subscription required] includes “Lessons from China to the City,” a consideration of the policy approach described as “engagement.” Leaders such as US Secretary of State Condoleezza Rice have argued that economic engagement with nations like China will lead to political and environmental reforms.
“Daddy, what’s a ‘Verizon’? An ‘Exxon’? An ‘Accenture’?” We whiz by these made-up names without asking questions our children might.
Mellon Bank, Iron City Beer, Lorain Coal & Dock: Those were company names I grew up with fifty years ago. They answered who, what and where fairly clearly.
The Sustainable Endowment Institute (SEI) recently released its College Sustainability Report Card. According to its Executive Summary, the Report Card “seeks to encourage sustainability as a priority in college operations and endowment investment practices by offering independent yearly assessments of progress.”
Institutions of higher education have played a significant role in SRI at least since the South African divestment movement of the 1980s. The Report Card examines both the investment practices of these schools and the sustainability of core university operations.
As we look back at the genocide and military conflict in Darfur, Sudan during 2007, the Sudan divestment movement in the U.S. has largely succeeded in bringing increased pressure on financial firms and companies involved in Sudan to sever their financial ties to the Government of Sudan.
A few of the many divestment-related news stories from the past year are highlighted below:
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