Return on Sustainability: How Business Can Increase Profitability and Address Climate Change in an Uncertain Economy by Wilhelm Kevin

Author:Wilhelm, Kevin [Wilhelm, Kevin]
Language: eng
Format: epub
Publisher: Pearson Education
Published: 2013-04-24T04:00:00+00:00

Socially Responsible Investing

Socially Responsible Investing (SRI) refers to the incorporation of the investor’s social or ethical criteria in the investment decision-making process.

Before I write about the specifics of SRI, I want to point out that “a full dozen years before some Wall Street experts and regulators reluctantly started to accept the possibility of an impending subprime mortgage debacle in the US, SRI and faith-based organizations started urging that major corrective action be taken to reduce subprime lending risks to homeowners, communities and investors at large.”cx

Surprisingly some within the faith community were sounding the loudest alarm bells. According to Laura Berry, executive director, Interfaith Center on Corporate Responsibility, “Time and time again, the prophetic voice of faith has allowed our members to anticipate emerging areas of corporate responsibility. ...before anyone else, members expressed concerns related to predatory lending practices, inappropriate underwriting standards and the potential consequences of securitization of debt instruments.”cxi

SRI has grown dramatically over the past decade due to a number of factors including:

• increasing customer awareness.

• investor preference for matching financial investments with ethical and moral values.

• the comparable financial performance SRI has been able to demonstrate against other traditional funds.

Figure 26. Evolution of SRI in the US.

Source: Social Investment Forum Foundation, Celentcxii

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