How many sustainable investors are there and who are they?

Sustainable and Responsible Investing (SRI) has been transformed in the last 20 years.  While investment options were once very limited, there are now a broad range of mutual fund choices and other investment strategies. 

Today, many affluent individuals, mission driven investors, pension funds, and other large institutional investors are taking social, environmental and corporate governance factors into consideration.  For example, the U.S. Sustainable Investment Forum’s 2012 Report on Sustainable and Responsible Investing Trends in the US reports that in the prior two years SRI investing had grown by more than 22% to $3.74 trillion.

That means that one out of nine professionally managed dollars in the U.S. takes these factors into consideration.  In fact, within the universe of professionally managed investments, SRI has by far been the fastest growing component.

If I adopt a SRI strategy would I be able to obtain the best possible investment returns?

The answer depends on whom you ask. The Bank of New York Mellon, hardly a bastion of liberal bias, concluded in a 2012 report that the data “seem now to indicate that SRI funds perform competitively to non-SRI funds over time.”* Click here for this report. The same report compared the performance of the main index of US SR funds, the MSCI KLD 400 Social Index, to a comparable traditional index and found “very little difference” over the 18 year life of the indexes.

Further evidence of the coming of age of SRI comes from the independent and respected investment analysis firm Morningstar.  Recently, several SRI funds have received Morningstar's highest distinctions, the award of a Gold, Silver or Bronze recommendation in their particular asset class.

A SRI strategy clearly can offer the potential for strong long term returns.  It is indeed possible to “Do Well by Doing Good.”

SRI's Positive Impact in your Community,  Across the Nation, and Throughout the World

Many investors first consider a SRI strategy to insure that their investments are aligned with their beliefs.  But through shareholder activism and community investing, SRI can accomplish even more: it can make an enormous real world difference.

Sometimes, the financial decisions all of us make can change the world.  Nobel Peace Prize winner Archbishop Desmond Tutu of South Africa reminded us of the tremendously important difference that individuals’ combined financial footprints had made:

In South Africa, we could not have achieved our freedom and just peace without the help of people around the world [who through] boycotts and divestment encouraged their governments and other corporate actors to reverse decades-long support for the Apartheid regime.

Shareholder Activism

Today, SRI's positive impact today is felt in ways great and small.  For example, socially responsible institutional investers and mutual fund companies have successfully worked with numerous Fortune 500 companies and reduced the companies’ carbon footprint.  Likewise, actions by large socially responsible investors have resulted in major companies such as Apple naming women to their corporate Board of Directors and adopting sexual orientation non-discrimination policies.

Community Investing

In one type of SRI, community investing, it is completely fair to say that SRI has transformed lives.   By making loans available to for-profit and not-for-profit community organizations which directly meet human needs, SRI can have an enormous positive impact.

This new type of financing helps these diverse community organizations start, expand and thrive.  Through some of these organizations, low income and disadvantaged individuals can gain access to better educational opportunities, while other organizations may focus on expanding families' access to quality health care, to affordable housing, or to a new job (or a fairer wage).  

What impact will your investment dollars have?

One of the most important decisions we will make is to decide how the proverbial "fruits of our labor" will be used.   Whether we like it or not, where our funds are invested can have a significant social impact.  It is your money and your choice.

Do you want to help?

In addition to changing your own financial footprint, there are many steps you can take to promote social and environmental change through SRI.  Whether it is volunteering at an organization devoted to community investing or helping arrange a talk at your office or your place of worship, please feel free to contact William Bruno at 703.207.0900.