Socially responsible investing (SRI) will become mainstream within the next couple of years according to a new study on the competitive advantage of green business practices.
A first-of-its-kind survey of 1,300 green businesses, to be showcased later this week at the annual LOHAS (Lifestyles of Health and Sustainability) conference in Boulder, CO reveals that, over the last decade, the assets of SRI investment portfolios grew an impressive 32 percent from $2.3 trillion to $3.07 trillion, while assets in investments overall grew just 27 percent.
"The breadth of investors participating in SRI has greatly expanded -- from early-on leaders of SRI to conventional investment firms and institutional investors that recognize the importance of taking ESG (environmental, social, governance) criteria into investment decision-making. For example, the UN Principles of Responsible Investing continues to grow, with more than a thousand signatories. "SRI" is maturing and expanding in terms of strategies, research, impact and assets. "Impact investing" is a term with increasing use, as investors seek to maximize the social/enviro/broad economic benefits of their investment to society -- whether nationally or internationally - Fran Teplitz, Director of Social Investing and Policy, Green America
Green America conducted this survey, along with two other organizations: EcoVentures International (EVI) and the Association for Enterprise Opportunity. Russ Gaskin, Chief Business Officer (CBO) of Green America (formally Co-op America) adds,
Socially responsible investing has been a consistently-performing segment of the green economy, especially over the past 20 years. It's interesting to note that companies who took a position against apartheid in South Africa in the mid '90s, for example, once this was achieved, they continued to roll over their money and looked for other opportunities in green and socially responsible funds.
Consequently, there is growing interest in avoiding investing in fossil fuel companies as a means of building pressure to address climate change and the need for investment in renewable energy and energy efficiency. Divestment in Sudan, for instance, has been a significant development. The breadth of screens applied to the investment decision-making process has developed considerably over the years as financial professionals and investors better understand the risks inherent in failing to examine the ESG conduct of corporations.
"Shareholder activism is on the rise -- with more and more support for shareholder resolutions addressing ESG issues. Shareholder issues of recent prominence include resolutions on corporate political contributions and lobbying, environmental issues, and climate change. Consumer/investor demand for more SRI products will continue to be crucial to the further development of socially and environmentally responsible investing -- and we look forward to the day when all investing takes into account corporate impacts on people and the planet." - Teplitz
"Today's consumers are looking deeper than ever before -- across the entire product supply chain, whether it's the food on their table, the clothes in their closet or where they choose to spend their vacations. And they are looking to buy from authentic companies that take corporate responsibility seriously and that have a sincere sense of community and connection." - LOHAS Director Ted Ning.