Innovation + Responsibility

If I was better at math, things might have turned out differently for me.

"The corporate social responsibility movement is fundamentally changing the way we do business around the world and I want to re-focus my career in a way that will allow me to contribute to that change.  I want to promote business advocacy while encouraging global responsibility, with the end result being a re-definition of how we measure business success. I want to make the triple bottom line – people, planet and profits – a reality in American corporate culture.  I plan to do this by devoting my career to the field of socially responsible investing, empowering shareholders to use their influence to force companies to acknowledge and nurture the connection between corporate social responsibility and business success."  

That's the opening paragraph of my business school application essay. Then I took finance during my first year of business school and, well...I had to re-think things a little bit! But despite my inability to grasp Black Shoales or how to calculate a Beta, my interest in SRI and my belief in it as a tool for change persist to this day.

So it was with great interest that I read the Executive Summary of the Social Investment Forum's 2007 Report on Social Investing Trends in the United States (the SIF releases this trend report every two years).  Below are some key findings:

Socially Responsible Investing is Growing. Fast.
SRI is growing "at a faster pace than the broader universe of assets under professional management" in the United States.  Approximately one in nine dollars under professional management - 11% - are involved in SRI.

Since the 2005 report, assets under management that used one or more socially responsible investing strategies has increased from $2.29 trillion to $2.71 trillion.

Assets in socially and environmentally screened funds were up 13 percent, from $179 billion in 2005 to almost $202 billion in 2007.

Big Money has Big Dollars in SRI
The bulk of assets invested in socially screened investments comes from institutional investors (typically the most powerful and influential shareholders around) and high net worth individuals. 

Institutional investor assets in SRI were up 27 percent in 2007 to $1.88 trillion from $1.49 trillion in 2005.

High-net-worth clients had $39.5 billion invested in socially screened investments, up from $17.3 billion in 2005. 

The Future of SRI
SRI is continuing to grow and it's my belief that as investors become more and more hip to the shenanigans of the greediest sorts that run rampant on Wall Street and that are currently reverberating throughout our economy (because, you know, Enron wasn't enough of a wake up call!), SRI will become more and more popular.

How You Can Get In On the SRI Action
You don't have to be a high-net-worth individual or an institutional investor to be part of the socially responsible investing movement.  You know that money you put into your IRA every year? Direct it to a socially responsible mutual fund.  Check with your company's 401(k) plan - maybe you have an SRI option in there to which you can direct a portion (or all) of your investments. 

I'm pretty excited that Sun recently announced a new addition to our 401(k) plan. It's called a "brokerage window" and it allows employees to invest their 401(k) dollars into any mutual fund they want, including socially responsible mutual funds! I have been eager for Sun to provide me with an opportunity to direct my investments in a way that is consistent with my personal values and now I have one!

Do You Want a Copy of the Social Investment Forum Report?
If you are interested in seeing a copy of the Social Investment Forum's Executive Summary, post a comment below with your email address and I will send it your way.