Spring 2004 - SRI Perspectives

Choices. It seems they are now more important then ever, magnified in this year of presidential election. From our votes this November to our investments of money, time, and energy – we’re choosing a future for our families and ourselves.

There are no values-neutral choices, and because choices make all the difference, we urge you to make each one count. Throughout this issue you will see how choosing to participate in socially responsible investing is positively impacting corporate behavior around the world.

We have yet to tire of saying it: more investors than ever before are choosing to match their money and values through socially responsible investing (SRI), this according to the Social Investment Forum's 2003 Report on Socially Responsible Investing Trends. The SRI strategy of community investing, which steers capital to grass roots development projects in the communities where it is most needed, grew an impressive 84 percent over the last two years. The 2003 report also found significant increases in another SRI strategy, shareholder activism, which is about working toward corporate reforms on social and governance issues. Shareholder advocacy is up 15 percent. Social investing assets in screened portfolios grew seven percent over the past two years - in a difficult investment climate where the broader universe of all professionally managed portfolios fell four percent during the same period. These new statistics mark an impressive showing for the impact and performance of SRI. US assets involved in SRI now total $2.18 trillion.

Great News for SRI Investors
And this is just the beginning of the good news for SRI in 2003. In the shadow of the mutual fund scandals, thousands of positive media stories emerged, including a cover story in Barron’s that brought even more assets into SRI, as funds and indexes showed strong financial performance.

Two SRI Funds stood out exceptionally in this past year: the Green Century Balanced Fund (GCBLX) and Winslow Green Growth Fund (WGGFX), both managed by Jack Robinson.

The Green Century Balanced Fund finished the year as the #1 top performing Balanced Fund with a one-year return of 63.5 percent, versus the average of 19.1 percent for all 537 Balanced funds ranked by Lipper. For the five-year period ending 12/31/03 the Green Century Balanced Fund averaged an annual return of 12.2 percent versus 2.4 percent for all Balanced funds, earning a #2 rank out of 357 funds during that time period.

The Winslow Green Growth Fund finished 2003 with a return of 91.7 percent. Lipper reports that for the one-year period ending 12/31/03 this fund ranked #2 out of 483 small-cap growth funds, based on total returns. Overall, small-cap growth funds had an average return of 44.8 percent for the year.

A new report from the Social Investment Forum noted that well over two-thirds (71 percent) of the largest (over $100 million in assets) socially and environmentally responsible mutual funds in the US earned the highest possible ratings through the end of 2003 from Morningstar and Lipper.

As for large SRI indexes, the Domini 400 Social Index (DSI), has outperformed the S&P 500 on a risk-adjusted basis for the 10-year period ending 12/31/03. It has gained an annual average return of 11.9 percent, compared to the S&P 500’s 11.1 percent gain. The Calvert Social Index (of about 600 stocks) generated a total 2003 return (dividends reinvested) of 30.9 percent to outpace the S&P 500’s return of 28.7 percent during the same period.

Every year SmartMoney magazine releases a list of the 30 most influential people in investing over the past 12 months. Making the list in 2003 was Amy Domini, co-founder of the Domini 400 Social Index. SmartMoney stated "Ms. Domini, 53, founded the first so-called socially responsible index mutual fund in 1991, and hasn't let up since. A champion of transparency, she began disclosing her proxy votes in 1999, then lobbied relentlessly to get others to do the same. Despite strong objections from the mutual-fund industry, the SEC this year started requiring funds to disclose voting policies and voting records."

Late in 2003, Calvert, the nation’s largest family of socially responsible mutual funds, released the results of a Harris Interactive® investor survey. The findings dramatically highlight investors’ growing concerns about ethical standards at corporations and mutual fund companies. “The survey clearly shows that investors understand that corporate responsibility matters,” said Barbara J. Krumsiek, Calvert’s President & CEO. “It is increasingly clear that investors believe that well-governed, socially responsible companies are better positioned to deliver long-term, sustainable value to their shareholders,” she added.

Conducted by Harris Interactive® for Calvert, the survey found that investors see a definite link between good corporate governance and shareholder value:

• 84 percent of investors are more likely to invest in a mutual fund if it engages in ethical operations and reporting.
  
• 71 percent of those surveyed said that they either strongly agreed (35 percent) or somewhat agreed (36 percent) that companies with higher integrity carry lower investment risk.
  
• 68 percent of those surveyed said that they either strongly agreed (31 percent) or somewhat agreed (37 percent) that companies with higher integrity deliver higher investment returns.

• The Green Mountain SRI Summit on Investor Responsibilitywill be held on May 23-26 in Stowe, Vermont. Find information on this institutional level event at www.imn.org
  The European SRI Summit will be held on June 8-9 in Oslo, Norway. For information on this new event visit http://www.imn.org
  
• The ASRIA conference on SRI in the Asia will be held this year on July 15-16 in Singapore. For more information on this event, go to http://www.asria.org
  
• SRI in the Rockies: The leading annual SRI event will be held this year on October 7-10 in Keystone, Colorado. For information on this event go to http://www.sriintherockies.com
  
• TBLI Conference: The Triple Bottom Line Investing conference on global SRI will be held on November 11-12 in Amsterdam, The Netherlands. For more information on this event, go to http://www.tbli.org

Feature articles
	BEYOND SRI - Where Do We Go From Here? Hal Brill
	Community Investing Comes of Age as the Fastest Growing Social Investment Strategy Timothy Freundlich
	SRI in Europe and the UK Matt Christensen
	SRI Funds for the Global Investor Rona Fried
	The 2003 Report on Socially Responsible Investing Trends in the United States the Social Investment Forum
	Accentuate the Positive: Achieving the full potential of SRI "Accentuate the positive, Eliminate the negative, Latch on to the affirmative" Sam Pierce, CEO, IdealsWork Financial
	PUBLISHERS NOTE - Designing our Future and the new 800# Cliff Feigenbaum
Exclusive Articles
	New Calvert Survey Shows Investors Link Corporate Responsibility With Reduced Risk, Better Returns
	Top Five Social Investing News Stories of 2003 William Baue, Socialfunds.com
	Over 70 Percent Of Largest Socially Responsible Mutual Funds Got Top Marks From Morningstar, Lipper In 2003 Analysis of Expense Ratios Finds SRI Funds Neither More or Less Costly Than Unscreened Funds Of Similar Type.
	Winslow Green Growth Fund Finishes 2003 Among Small-Cap Growth Leaders Winslow Management Company announced that the Winslow Green Growth Fund (WGGFX) finished 2003 with a return of +91.74%, which places the fund among the leading small-cap growth funds for the year.
	Community Investing Grows and Goes Global Community investing, the fastest growing asset class in socially responsible investment, yields benefits to both investors and local communities around the globe. Steve Lippman, Trillium Asset Management
	Social Capitalists: The top 20 groups that are changing the world. Cheryl Dahle, Fast Company magazine