Shareholder advocacy is a valuable and particularly influential part of SRI. This is the process by which investors who own stock in a company express their opinions and values directly with the company through proxy resolutions, mailings and other communications, and negotiation. Recently, my friend Leslie Samuelrich, President of Green Century Funds*, visited me in New York. I’ve long been a fan of Green Century because of their commitment to shareholder advocacy, and Leslie and I talked about some of their current efforts and achievements.
It has been quite some time since socially responsible impact (SRI) investing has been a fringe phenomenon - something only a handful of mission-based organizations and morally-conscious individuals engaged in because they cared as much about doing something decent with their money as earning a return on it. Today, SRI could more accurately be characterized as the single largest and most influential trend in investing, period.
Since November 8, the world has seemed darker for many SRI investors and others who see themselves as socially liberal or progressive. In my last two blogs, however, I’ve suggested that actions by the U.S. government will likely not dictate the future of human and planetary wellness and sustainability. Simply put, our future is still in our own hands, in how we as people and communities conduct our lives, our relationships, and our businesses – in how we generate our incomes and how we spend and invest those incomes.
On that front, there is some very good news, released very recently by US SIF (The Forum for Sustainable and Responsible Investment). SRI is booming!! In 2016, USSIF’s SRI Trends Report* reports that sustainable, responsible, impact (SRI) investments in the U.S. now total $8.72 trillion. That’s a 33% increase from 2014!
Most of this investment volume is implemented by professional money managers on behalf of financial advisors and institutional and retail SRI investor clients like you. These managers consider environmental, social, and corporate governance (ESG) criteria alongside financial criteria in constructing and managing their portfolios, and the top two issues they are considering today are conflict risk (i.e. terrorism and war-making) and climate change.
An integral and important part of the SRI trend is the active participation by SRI professionals and investors in shareowner advocacy. Shareowner resolutions filed on ESG issues from 2014 to 2016 represented over $2.5 trillion in assets at the beginning of 2016 – and those resolutions are garnering greater support at corporate shareowner meetings around the country.
Taking an increasingly important part as well is the continued growth and spread of different impact and community investment opportunities and products. Community impact investments** allow more and more investors to direct their capital toward local farming and urban community development, fair trade businesses, sustainable forestry, micro-finance, alternative energy projects, and so on.
Perhaps most gratifying – the explosive SRI growth is being driven largely by client demand. SRI continues to bubble up from the grassroots, from people like you and me and from religious and endowment institutions, not from government action or mandate.
*See Report of US Sustainable, Responsible and Impact Investing Trends 2016, published by US SIF.
**Mention of specific types of investments does not constitute a recommendation to invest.