2012 Trends in Responsible Investing
By Tyler Collins
US SIF – the Forum for Sustainable and Responsible Investment – has released a new report tracking growth and reflecting trends within the sustainable, responsible, impact (SRI) investment industry in the U.S.
The 2012 Report on Sustainable and Responsible Investing Trends in the United States measures ESG integration (environmental, social, governance) in investment analysis and portfolio selection, the filing of shareholder resolutions on ESG issues, and community impact investing.
The report notes that as of year-end 2011, the overall total of professionally managed SRI assets in the U.S. was $3.74 trillion, up by 22% from 2009. The total is 486% greater than in 1995, the first year that US SIF began measuring the size and scope of the SRI industry—in sharp contrast to the 376% growth of professionally managed conventional assets over the same time period.
The gain in market share is attributed to increasing client demand for ESG investing strategies and growth of community development bank assets, as consumers switch from large banks, are credited with much of the impetus for growth.
The report highlights progresses made on a variety of fronts in recent years, including the fact that now over 50 percent of S&P 500 companies have agreed to disclosure and board oversight of corporate political spending. It’s also noted that environmental and social proxy ballot issues are garnering more shareowner votes and more money managers are filing shareowner resolutions.
Alternative investment vehicles, such as private equity and venture capital funds, responsible property funds, and hedge funds have experienced as much as 250% asset growth just since 2010. Sudan topped the list of avoidance policies, with nearly $1 trillion invested in U.S.-domiciled accounts that eschew investments in companies doing business there.
“The premise underlying sustainable investing is elegant in its simplicity,” said Joe Keefe, President and CEO of Pax World Management. “Companies that do a better job of integrating environmental, social, and governance (ESG) standards into their business models are better positioned than their less-enlightened competitors to provide investment performance over the long term.”
Posted: November 20, 2012