Socially Responsible Investing - Where to Now?

Financial Transformation
by Cliff Feigenbaum

At the recent World Economic Forum in Davos, Nobel Prize winner and microcredit pioneer Muhammad Yunus declared, "This is a good time to redesign the entire financial system."

There’s no time like the present to begin.

Yes, there have been some financial reforms suggested in Congress lately to move the economic recovery forward - but how have they been working out?
We suggest that we simplify and begin closer to home. In fact, that idea of thinking globally and acting locally might be updated to thinking regionally and acting locally.

A few locally focused initiatives launched in the last year are gaining momentum around the country. The Slow Money movement (http://www.slowmoneyalliance.org ) looks at investment strategies appropriate to the realities of the 21st century, mostly around the world of local food and farming. The Move Your Money campaign (http://www.moveyourmoney.info ) helps individuals and companies move their finances into local community banks and credit unions in the towns where they live and operate – and out of large out-of-state financial institutions.

GreenMoney Journal believes that local dollars equal local impact, so when we relocated to Santa Fe back in 2000 we opened a business checking account at the 1st National Bank of Santa Fe in their Community Connections fund. I also have a CD with them as well as with the Permaculture Credit Union here in town.

Before we move on to this issue, here is more good news for SRI investors: Recently the Social Investment Forum (SIF) released a new Report stating: "Two Thirds of Socially Responsible Mutual Funds Outperformed Benchmarks During 2009 Economic Downturn."

The SIF Report shows that the verdict on SRI mutual fund performance is in: A review of 160 socially responsible mutual funds from 22 members of the Social Investment Forum found that the vast majority of the funds -- 65 percent – outperformed their benchmarks in calendar year 2009, most by significant margins. These SRI funds topped benchmarks across nearly all asset classes, including balanced, large cap, small cap and global funds, as well as bonds.

Particular standouts on SRI mutual fund performance were the 73 large cap funds, the largest single category of SIF member funds, where nearly three out of four (72.6 percent) outperformed the S&P 500. On average, large cap SRI funds bested the S&P 500 by more than 6 percentage points. A majority of the large cap funds offered by SIF members also outperformed the S&P 500 over three years and over 10 years. ( See the full table of results at http://www.socialinvest.org )

"This analysis underscores the reality that socially responsible investments offer what are genuinely competitive returns," said Cheryl Smith, chairman of the board at SIF and president at Boston-based Trillium Asset Management. "In fact, the 2009 data show that SRI funds specializing in large cap stocks have turned in an extremely strong performance that outpaced the S&P 500 over both the short term and the long term."

On to this Spring issue, which features a collection of Socially Responsible Investing articles beginning with our interview of Leslie Christian and Carsten Henningsen, co-founders of the Portfolio 21 fund which has focused on sustainability over the last 10 years; next Michael Kramer offers more transparency and clarity on the NI Social Ratings featured on our ever-expanding mutual fund chart. As per my last minute request, GreenMoney editor, Ted Ketcham writes an insightful review of "Rediscovering Values on Wall Street, Main Street and Your Street," by Jim Wallis. And Don Shaffer of RSF Social finance wraps up the issue by writing on ‘What’s Next?’ Local Investing.

Also in this expanded version of our Spring print issue: Reflecting the global nature of SRI and CSR, and specifically SRI in the UK, we feature an encouraging article by Penny Shepherd, head of the UKSIF. Also you will find lots of other SRI news, and of course check out our Global Calendar of Green Events, which now features over 150 important events to help readers stay up to date on CSR, SRI, ESG, Green Building, Renewable Energy and so much more. For this Spring, check out the CERES Conference in Boston, the Investors Circle conference in San Francisco, and the TBLI Conference in Tokyo, to name a few.

In closing, I want to acknowledge Lou Schreiber, a valuable member of the Sustainability community here in New Mexico who passed away in January. He is greatly missed, but the Advanced Sustainable Technologies Center he worked so hard for will be opening this fall at Santa Fe Community College. Lou, it was an honor to know you and work with you.

Feature articles
	The GreenMoney Interview: Leslie Christian and Carsten Henningsen of the Portfolio 21 mutual fund One of the most enjoyable tasks at GreenMoney Journal is interviewing true leaders in the socially responsible investing world. Interviewed by Cliff Feigenbaum and Ted Ketcham, GreenMoney Journal
	"Rediscovering Values on Wall Street, Main Street, and Your Street" a new book by Jim Wallis We've been asking the wrong questions. Instead of When will this economic recession end? long-time progressive Christian activist and spokesman, author Jim Wallis, CEO of Washington D.C.-based Sojourners Magazine, encourages us to ask instead, How will this recession change us? Book Review by Ted Ketcham, GreenMoney Journal
	What's Next? Local Investing Thankfully, we are saying goodbye to the Steroid Years, brought to you by executives of Wall Street firms like Goldman Sachs and Morgan Stanley, who sold mortgage-backed securities at the same time betting they would fall in value. Other stars included AOL/Time Warner, Enron, and Bernie Madoff. Perhaps it was no coincidence that this era of artificially pumped-up financial markets coincided with rampant steroid use in professional baseball. Mark McGuire, the home-run champ, recently revealed that he used steroids throughout his rise to glory in the late ‘90's. [1] By Don Shaffer, RSF Social Finance
	How Sustainable Are Your Investments Really? A look inside the methodology of the NI Social Ratings In the past few years, we have witnessed the proliferation of investment opportunities under the green, sustainable, and socially responsible umbrella. Given the wide array of societal values represented in the social investment industry, it is sometimes surprising to investors that there aren't universal social and environmental criteria used by managers. As such, when conducting research as part of the investment selection process, investors quickly realize there are "many shades of green." By Michael Kramer, Natural Investment LLC
Exclusive Articles
	SRI in the UK: Green and Ethical Investing starts an exciting new growth phase The UK's modern green and ethical investors By Penny Shepherd, UKSIF
Additional Online Articles
	SRI – How Much is Enough? "Beyond SRI: The Future of Socially Responsible Investing." by Ralph Meima, Marlboro College MBA in Managing for Sustainability
	Adding Social Media Data to the SRI Research Toolbox Imagine knowing exactly what your friends think of you and say about you to others, and seeing who in your social network has the most influence over the opinions that frame these conversations. Thanks to the emergence of Web 2.0, which gives people and communities internet addresses with all the functionality to allow to them to interact as a community, and the chatter on websites and blogs, people are communicating and posting opinions in the virtual world like never before. Platform like Facebook and Twitter are altering social networks and fabrics. By Eric Steedman of Nexalogy Environics and Heather White of New Standards Research
	Slow, Sustainable Investing Within the social investment field there is a growing buzz about “Slow Money.” Indeed, Woody Tasch, founder and Chairman of the Slow Money Alliance, wrote about the emerging movement in recent issues of the GreenMoney Journal, But to date few Slow Money investment vehicles have been available and therefore little capital has flowed down the Slow Money path. That is beginning to change. The Carrot Project is among the first vehicles utilizing investment dollars from social investors and putting them to work to help rebuild a sustainable food system. The Carrot Project is employing a community investment model to address the financing needs of small- and mid-size sustainable farmers in the northeast U.S. By Dorothy Suput, The Carrot Project and Eric Becker, Clean Yield Asset Management
	Socially Responsible Investing in the Daily World In a world filled with genuine immediate need, it tasks the soul when trying to decide how to help, how much to give, what to give. It is so hard to witness the suffering of the inhabitants of Port-au-Prince, people trying to cope with the devastating aftermath of a major earthquake. It is so hard to imagine the financial devastation facing people who have been engulfed by the economic tsunami of the Big Recession. However, one needn’t travel far to experience tribulation first hand, in all our communities there are people methodically facing life’s challenges each day. And just as these who struggle occupy their place in the economic spectrum, there is also a place for those that provide assistance and support. by George Kenefic, The Loan Fund
	The Opportunity Green Conference and the Opportunity for Mass Collaboration to Change Everything There is much to acknowledge and celebrate within the sustainability movement, and as Lester Brown wrote in a recent article, “Saving civilization is not a spectator sport. Each of us has a leading role to play.” I am heartened by the way that the sustainability paradigm has pervaded so many aspects of the economy and society, as evidenced by the sold out Opportunity Green Conference last fall. by Greg Wendt, Enright Premier Wealth Advisors, Inc.
	Social Investment Forum: SEC Climate Action “Important First Step” Toward Broader Sustainability Reporting For Investors The 400-member Social Investment Forum (SIF), the U.S. membership association for socially and environmentally responsible investment professionals and institutions, applauded the U.S. Securities and Exchange Commission (SEC) for its recent decision to issue definitive guidance to companies on disclosing climate change risks to investors.
	SEC Ruling on Proxy Disclosure Is Likely to Lead to Increased Shareowner Activism An overview by the Corporate Library details some of the possible effects of the ruling on shareowner actions in what could shape up to be a critically important proxy season. by Robert Kropp, Socialfunds.com
	Top Green Business Stories of 2009 and the 10 Trends “We’re still here.” That may seem as fitting an epitaph as any for 2009, at least for most green business professionals. By Joel Makower, Greenbiz.com
	Grameen Foundation and Microsoft Announce Initiative to Expand Value and Use of Technology for Microfinance Inaugural Microfinance Leadership Summit focuses on helping microfinance institutions reach more of the world’s poor through technology.
	Companies Pushed to Disclose Political Contributions Supreme Court decision makes political disclosure even more important for corporations
	The Appleseed Fund Tops Morningstar Midcap Value, Domestic SRI Equity Fund Categories Over Three Years The Appleseed Fund (NASDAQ: APPLX) was ranked by Morningstar as the #1 returning U.S. midcap value fund among 342 funds for the three years ended December 31, 2009, and the #1 returning socially responsible domestic equity fund among 166 funds for the same period.
	Pax World Launches ESG Managers Portfolios Powered by Morningstar Associates New Multi-Manager Asset Allocation Funds Feature Leading Managers in the Sustainable Investing Industry
	New Global Climate Prosperity Scoreboard Finds Over $1 Trillion Invested in Green Since 2007 Ethical Markets Media [USA and Brazil] (http://www.ethicalmarkets.com ) and The Climate Prosperity Alliance (http://www.climateprosperity.com ) in early December 2009 launched their Global Climate Prosperity Scoreboard® which tracks private investment in companies growing the green economy globally. This new, never before reported number, showing $1,248,740,645,993.00 (over $1.248 trillion) in total investment since 2007, indicates how investors and entrepreneurs are leading governments in promoting sustainable growth. The scoreboard totals investments in solar, wind, geothermal, ocean/hydro, energy efficiency and storage, and agriculture. We purposefully omitted nuclear, "clean coal," carbon capture and sequestration, and biofuels. We indicate which investments have been publicly announced and committed by major companies for 2010 and beyond.