Interesting article on social investing–
TheÂ application, which is based onÂ Salesforce,Â comes out this fall and is being tested by more than 50 non-profits and charities. It tracks what a more conventional investor might look for â€” revenue, return-on-equity and assets and liabilities. But it also follows less traditional metrics that a non-profit user can design, like school drop-out rates for an education program or mosquito bed-net sales. Acumen will offer it for free to non-profits and work out other financial arrangements with some of the larger foundations.
Richardson, President of Renewal2 Investment Fund, is pleased to announce the first close of the Fund at over $16 million. Renewal2 is one of a handful of funds in North America that focus on companies which have positive environmental, social and financial returns. The Fund builds on 15 yearsâ€™ experience of high-impact social investing at Renewal Partners where early capital was deployed in leading local companies, such as Happy Planet and SPUD, and North American leaders such as Stonyfield Farms and Seventh Generation.
To download their release, please click here: 2009-05-25 Renewal2 Media Release
Investors, it seems, still have a proclivity toward good.
So notes Ingrid Saukaitis Dyott, co-manager of Neuberger Berman Socially Responsive Fund (symbol: NBSRX), who says that the economic downturn hasn’t hurt interest in socially responsible investing.
The Socially Responsive Fund is still seeing investor inflows despite the global economic downturn, Ms. Dyott says. Hard times can bring out the best in investors and companies, she said, noting that funds didn’t yield to pressure after the terrorist attacks on Sept. 11, 2001, when some called for screens blocking investment in weapons companies to be dropped.
Continue reading at WSJ
According to this marketwatch article:
The market’s meltdown has left every category of stock mutual funds in the red this year, but one area that has held up better than most is socially responsible investing.
“It used to be thought that you had to give up returns to get those [ethical] screens,” said TIAA-CREF’s O’Brien. “But we see returns that are on a par with well-performing mainstream funds.”
The Portfolio Data Management System (PDMS) will focus on so-called social entrepreneurs, or groups trying to bring about social change while also functioning like a businessâ€”in some cases even trying to make money. Some social enterprises are nonprofits, while others seek a return on investment.
The PDMS is to be unveiled at the Clinton Global Initiative Summit.Â Link
Here’s this weekend’s article which comes from the New York Times. I haven’t finished reading it but wanted to link to it since it’s pretty long. Here’s a great quote that gives you some flavor:
â€œYou run into fundamental problems in trying to grow good because neither for-profit nor nonprofit is set up to do what new entrepreneurs and others are trying to do â€” namely, harness the power of private enterprise to create social benefit,â€ said Jay Coen Gilbert, co-founder of B Lab, a start-up organization based in Philadelphia that will develop what he calls â€œB corporations,â€ which engage in fourth-sector pursuits.
I haven’t written about socially responsible investing in a while so I thought I’d link to two recent articles that I read:
First is this article written by David Kathman on Morningstar about socially responsible investing, (SRI) funds. This column does a really good job of summarizing the broad landscape of SRI funds.
Most secular SRI funds avoid alcohol, tobacco, and gambling stocks, but beyond that they vary quite a bit in the criteria they use, just as the religious funds do. That can be both good and bad. On one hand, there are lots of choices for SRI investors, but on the other hand, it’s hard for beginners to sort through all the options.
He follows by discussing several SRI focused fund shops and goes into detail on Calvert, Pax, and Walden. He also discusses social funds of more popular money management firms such as Vanguard FTSE Social Index, TIAA-CREF Social Choice Equity, and iShares KLD Select Social Index. Actively managed funds that are mentioned are Dreyfus Premier Third Century, Neuberger Berman Socially Responsible, and Legg Mason Partners Socially Aware.
The article is really in-depth and is probably the best summary I’ve seen on SRI mutual funds. If you have a sincere interest in SRI, you’ll benefit from reading the article and heading over to Social Funds to check out the resources there.
The second article I’m passing along focuses on socially responsible ETFs, or exchange traded funds, which are “open ended mutual funds that can be traded at any time throughout the course of the day” (via Wikipedia). This article is a nice addendum to the Kathman article.
Another excellent piece for this weekend’s reading– Venturebeat, a blog about new technology ventures, publishes a piece on social capitalism, its two basic models, and why some companies are likely to succeed while others are not. The post is written by Jay Parkhill, who is an attorney that works in the technology sector. Keep in mind that most Venturebeat readers are technology investors so Jay is writing for that audience.
According to Jay, the two basic models are:
1. Companies that seek to do good by capitalizing on our existing shopping patterns. Example: Ethos water.
2. Businesses that encourage consumers to spend money in ways they would not otherwise in order to create a social and/or environmental impact. Example: Terrapass, Kiva.
Read the article for the complete analysis and the pros and cons of each model.
This week’s reading comes from Business Week and is about social responsibility— the article discusses a U.N. initiative that was launched in 2000, called UN Global Impact, to promote socially responsibly business practices in the world. The program looked at social responsibility from a financial perspective and adopted principles for responsible investment. It currently has more than 3,800 participants in 100 countries.
Recently, the Global Compact decided to expand its efforts to the academic community and is in the process of developing a set of Principles for Responsible Business Education. In January, Angel Cabrera, president of Arizona-based Thunderbird School of Global Management was named senior adviser to the Global Compact and is heading the task force developing the principles, which are to be presented at a meeting in Geneva in July.
Check out the Business Week article for the full Q&A with Angel Cabrera.