This page has a collection of useful papers, lectures, articles and links on Socially Responsible Investment (SRI).
Socially Responsible Investment – lecture by Avinash Persaud – Will the growth of Socially Responsible Investment (SRI) support capital flows to emerging markets or hinder them? Find the transcript of the lecture here.
Why It Can Be Economically and Morally Rewarding to Invest in Developing Countries – Ricardo Gottschalk
Socially Responsible Investment and International Development: Practice and Potential. This is a draft paper by Stephen Spratt and gives a very useful historical perspective from 1760 onwards on Socially Responsible Investment.
Social investment, corporate citizenship and development. This 4 page article by Stephen Spratt & Avinash Persaud gives a nice overview of SRI issues and outlines different negative and positive screening methods.
The Economic Virtues of SRI and CSR – by Jeroen Derwall – “Our evidence strongly suggests that the average SRI fund has earned returns similar to those of mainstream mutual funds in many countries around the world. Using a battery of multifactor performance evaluation models and SRI samples from eight retail equity markets, we found that the risk-adjusted returns of aggregated SRI fund samples are not statistically different from those of their conventional peers. ”
European Corporate Pension Fund and Sustainable Investment Study – Eurosif – provides a similar depth of analysis as the above document – 2011
Sovereign Wealth Funds and Long-term Investing – edited by Patrick Bolton, Frederic Samama and Joseph E. Stiglitz
Making the Case for UK Pension Fund Investment in Developing Country Assets – Jenny Kimmis, Ricardo Gottschalk, Edna Armendariz, Stephany Griffith-Jones – 2002
Clean Investment Campaign Guide – CAAT – 2006 – has good information on the possibility of ethical investment in councils
“Local authority pension funds in the UK have attracted public criticism for holding investments in the tobacco industry. There are three common responses to this criticism, each of which will be examined in this briefing:
1. Local authority pension funds have a legal duty to maximise financial return and cannot give consideration to ethical issues.
2. Pension fund trustees do not interfere with the day to day decisions of external investment fund managers.
3. Tobacco is a low risk, high return investment.
“This briefing challenges the claim that local authorities are in effect ‘duty bound’ to invest in tobacco and:
1. clarifies the law regarding the legal duties of pension fund trustees and explains the options for trustees wishing to properly consider ethical concerns around investments in the tobacco industry;
2. counters common misconceptions about the fiduciary duties around investments; and
3. provides information on the financial risks facing the tobacco industry which raises doubts about its long-term investment viability.”
Co-operative Capital: What it is and Why Our World Needs It. This goes into much more detail about mechanisms for financing co-operatives.
With Great Power, comes Great Responsibility: Can Corporate Power be Used for Good? – Rob van Tulder – 16 October 2010 – “Mainstream institutional investors in frontrunner European countries, like the Netherlands or Norway, have also started to become more vocal in their plea for more sustainability in the companies they invest in. The market share for sustainable investment in the Netherlands is around 4% (VBDO, 2010). However, investment funds apply primarily negative criteria as well for their own investment portfolio. A prominent example is the Norwegian government pension fund – Global. The fund‟s Advisory Council on Ethics was established in November 2004, following a new regulation that required the management of this government fund to include also ethical guidelines. Within five years, the fund has excluded around 42 major multinational enterprises, including such well known companies as Wal-Mart, Altria, BAT, Honeywell, Northrop, Philip Morris and Rio Tinto. The reasons for divestments are slightly broader than in the Anglo-Saxon countries, which has made Global a force towards a more active sustainability approach of companies. On the whole, however, the prime reasons for divestment remain tobacco (17/42); military including production of cluster ammunition (18/42); 5 environmental damage (5/42) and human rights violations (4/42). On 19 January 2010 the Ministry of Finance announced that 17 tobacco companies had been excluded from the fund. The total divestment from these companies was USD 2bn (NOK 14.2bn), making it the largest divestment caused by ethical recommendations in the history of the fund. Three previously excluded companies (because of environmental damage and cluster ammunition) were reinstated due to changed strategies. More than 80% of the screening thus is primarily based on the sector companies are in, not on other positioning and strategic decisions. Comparable discussion appeared in other countries. When pension funds in the Netherlands were accused of investing in companies that produced „cluster bombs‟ they withdrew their investments. But in other areas they remain relatively inactive, without an opinion – neither critical nor supportive – of transition trajectories towards more sustainable business practices, which re-inforces the negative duty approach of public companies.”
Campaign Option: Ethical Investment – People and Planet guide
Ethical investment break-through by Edinburgh P&P – Edinburgh P&P have achieved a major success in their campaign to get their university to adopt an ethical investment policy.
Letter to London Pensions Fund Authority from Jenny Jones, Green Party Member of the London Assembly. Response from the London Pensions Fund Authority on what they are doing about Responsible Investment – November 2012
FairPensions – FairPensions campaigns for major institutional investors to adopt Responsible Investment: using shareholder power to hold companies to account.
Ethical Investment Wiki this site will tell visitors all they need to know about Ethical Investment (EI) and includes: a resource pool, campaign case studies, FAQs and Useful Links.
FTSE for Good – The FTSE4Good Index Series has been designed to measure the performance of companies that meet globally recognised corporate responsibility standards, and to facilitate investment in those companies.
EIRIS is the leading global provider of independent research into the social, environmental and ethical performance of companies.
Press coverage on SRI
A chilling legacy – Bill Randall – 5 April 2012 – Inside Housing – “Local government pension fund investments total more than £150 billion. Reinvesting 10 per cent of the total in soft loans for a nationwide retrofit programme is a safe investment and more ethical than investing the money in tobacco and arms. Public service pension funds are used for the public good in the US and Canada. We should follow suit.”
CSR is no longer a ‘bolt-on’ activity – The Guardian – Sandra Macleod
Green Investing: Putting Your Money Where Your Values Are Pays Off – Liz Davidson – Forbes – 6/23/2011 –
“First of all, the socially responsible investing (SRI) universe has expanded by 90% in the past few years according to the 2010 Report on Socially Responsible Investing Trends in the United States. The report states there were 260 funds that incorporated environmental, social and governance (ESG) factors in 2007. That number rose to 493 in 2010. It turns out many of these socially responsible funds beat their benchmarks as well. According to a report released by the Social Investment Forum, of the 73 socially responsible large-cap funds studied, 72.6% outperformed the S&P 500 by more than six percentage points in 2009. In fact, the majority of SRI funds in each class outperformed their respective benchmarks, with the exception of the U.S. mid cap and international equity-EAFE class. Of course, not all SRI funds are going to outperform their indexes every year, but the myth of socially responsible funds being lackluster performers is simply that – a myth. Investors are realizing they can get solid returns while also investing in line with their values.”
Ecologist guide to ethical investments – Eifion Rees and Matilda Lee – The Ecologist – 5th November, 2010
Local authorities investing over £700m in arms trade – Richard Norton-Taylor – The Guardian – 8 May 2006
Socially responsible investment – The Guardian – Tony Levene – 22 April 2006 – Now all firms are graded and it is having a big impact on how they operate
Charities ‘investing in arms trade’ – Richard Norton-Taylor – The Guardian – 8 April 2004 – “Many public bodies, including NHS trusts, churches, local authorities, universities, trade unions and charities, continue to invest in the arms trade, despite their commitment to beneficial and ethical goals, according to a report published yesterday.”
“Local authorities hold arms company shares while claiming to have ethical investment policies, the Campaign Against the Arms Trade (Caat) says.”
“Its list includes Essex, Durham, North Yorkshire, and East and West Sussex county councils and the London boroughs of Bexley, Camden, Haringey, Tower Hamlets, Havering and Sutton, as well as Strathclyde pension fund. “