The Social Investment Community

and its

Modes of Communication

Rory O'Brien

January 6, 1998
Table of Contents

Introduction        1
Overview of the Field of Socially Responsible Investing (SRI)        2

Players in the Social Investment Community:        4

Core Organizations        4
National Trade Associations        4
The Social Investment Organization (SIO) in Canada        5
The Social Investment Forum (SIF) in the United States        5
The UK Social Investment Forum (UKSIF) in the United Kingdom        6
Regional and Special Interest Networks        7
Socially Responsible Investment Coalition        7
Christian Ethical Investment Group (CEIG)        8
Research Organizations        8
The Investor Responsibility Research Center        9
The Ethical Investment Research Service        9
General SRI Resource Organizations        9
Council on Economic Priorities (CEP)        10
KLD - Kinder, Lydenberg, Domini & Co.        11
Franklin Research & Development (FRDC)        12
Shareholder Activists        13
Interfaith Center on Corporate Responsibility        14
Association of Critical Shareholders in Germany        14
Publishers and Distributors        15
The GreenMoney Journal (GMJ)        15
New Initiatives in Economics and Finance Catalogue        16
Social / Ethical Investment Trusts and Funds        16
Ethical Funds, Inc.        16
Calvert Social Investment Fund        17
Stewardship Trust        18
Working Opportunity Fund        18
Investment Advisors        19
First Affirmative Financial Network        19
S & B Ethical Investment        20

SRI-Affiliated Organizations        20
Corporate Social Responsibility        20
Business for Social Responsibility (BSR)        21
Students for Responsible Business (SRB)        22
Corporate Watch        22
The Multinational Monitor        23
Consumer        23
Ethical Consumer Research Association (ECRA)        23
INFACT        24
Financial Institutions        24
Credit Union Central of Canada        25
Citizens Bank of Canada        26
Shorebank Corporation        26
Social Change Nonprofits        27
CERES        28
Co-op America        29
Educational Institutions / Academic Researchers        29
Boston College        29
Institutional Investors        30
TIAA-CREF        32
Council of Institutional Investors        32
Corporate Governance        33
Individual Investors        33

Modes of communication in the SRI community        34

Interpersonal Forums:        34
Conferences        34
SRI in the Rockies        35
Investors' Pasquinade        35
Forums and Seminars        35
Spring 1997 The Citizens' Forum Series        36
Financial Literacy - an Expert Briefing        36
Speeches and Presentations        36
UKSIF AGM 1997 Keynote Speech        37
"International Social Investment - Past, present and future"        37
Public Awards        37
Moskowitz Prize        37
SRI Service Award        38
Boards of Directors / Boards of Trustees / Advisory Councils        38
Calvert Social Investment Fund        39
Educational Courses        39

Research products:        40
Reports        40
1997 Report on Responsible Investing Trends in the United States        41
Tobacco's Changing Context: A Challenge and Opportunity for Institutional Investors        42
Canadian Industry Report Series        42
Surveys and Studies        43
Calvert/Yankelovich Survey        43
Good Money, Inc. - polls, surveys, and studies        43
Ph.D. Dissertations        44
SRI Stock Indexes        45
Good Money Industrial Average        45
The Domini 400 Social Index        45

Non-electronic publications:        46
Books        46
Newsletters / magazines        48
Franklin Research's Insight        48
The Corporate Ethics Monitor        49
Articles in Mainstream Media        49
a) newspapers        50
b) national magazines        51
c) trade magazines        51
d) journals        52

Electronic media:        52
Videos and Television        52
Socially Responsible Banking and Investing Forum        53
Citizens' Forum Series        53
NBC Nightly News        53
Telephone Hotlines        53
The Social Investment Information Line        54
Franklin Insight Inc.        54
Social Investment Forum        54
Software Programs        54
SOCRATES        55
Online Forums and Mail Lists        55
Social Investment Forum private mail list        56
SRB mail list        56
The Motley Fool        56
Morningstar        57
Extensive Websites        57
GreenMoney On-Line Guide        58
Good Money, Inc.        58
Ethical Business        58
Investing for Change        59
Interesting and Useful Online Tools        59
Know What You Own ® Plus Service        60
Performance Calculator        61
GreenMoney Public Company Web        61
Books online        61
SIF's Online Sign-up Form        62
SIF's Socially Responsible Mutual Fund Performance Chart        62
On-line Dictionary        62
Action Alerts        62

Conclusion        63

Bibliography        65


In order to immerse oneself in a field of study, one must first get an understanding of who the players are that are contained within the 'universe' of that particular field. Once these actors have been identified, it becomes important to understand the dynamics of their operations, particularly with regards to the nature of their communications, both within their community as well as between their community and the larger society in which they operate.

This paper will provide an overview of the players and their modes of communication within the field of socially responsible investing (SRI). It is presented primarily in the format of a typology, rather than as an exhaustive analysis of the inner workings of the field, in order to serve as an orientation device for action researchers seeking to do further investigative interventions into this community.

The typology is not presented with a complete set of examples. Such an endeavour, while perhaps an ideal to pursue at some future point, is beyond the scope of this research at the present time. Rather, the limited number of examples for each category of actor and communication venue were chosen on the basis of their assumed reputation and stature in the field, their importance to the field, and the degree to which they are illustrative of their respective categories.

For the most part, the organizations and information resources included in this study exist in the English-speaking countries of Canada, the United States, and the United Kingdom. Though SRI-related enterprises do exist in other parts of the world, the vast majority of the movement resides in these three countries.

Because the field is relatively new and very dynamic, many of the leading institutions are not financially able to publish extensively. However, thanks to the relatively inexpensive option of the Internet and the World Wide Web, many are beginning to post their information online. Most of the research for this paper was done over the Internet, and the quotations used were taken from the online electronic copy. The extensiveness of these quotations help to avoid ambiguity from interpretation, and provide details to further enrich the knowledge base of the reader. The numerous citations also allow for subsequent follow-up where desired.

Overview of the Field of Socially Responsible Investing (SRI)

Since the first stock exchange was established in London in 1698, people have been willing to invest their money in companies which they do not wholly own in order to receive a share of the profits. It has only been in the past 30 years, however, that investors began to be more systematic in applying non-monetary, value-based criteria to their investments. These investors seek to get 'beyond the bottom line' to reap social dividends as well as financial ones.

Such values-based investing has been referred to as ethical investing (mostly in Australia and the UK) and socially responsible investing (in Canada and the US, for the most part). Its major impetus to growth came out of the anti-apartheid movement in the 1970s and `80s, when, spearheaded by the churches, governments and major corporations refused to invest in, or trade with, South Africa. This financial ostracism was a decisive factor in the successful elimination of the apartheid system there by the mid 1990s, and proved the power of applying an investment 'screen' to achieve a socio-political end.

This concept of applying 'screens' to one's investment portfolio is a cornerstone of socially responsible investing (SRI). Screens are criteria that allow comparisons between an investor's values and a company's operations, and they can be both positive and negative. For those investors who think it is important to improve the situation of women in the workforce, for example, a positive screen would be to invest in a company that has a greater-than-average percentage of women in upper management or on the Board of Directors. A negative screen, on the other hand, would be to avoid investing in a company that engages in practices that the investor cannot condone, such as producing or distributing tobacco products.

Another aspect of SRI is that of shareholder activism, in which shareholders actively promote their values by publicly criticizing (or, in some cases, praising) policies and practices of those corporations in whom they hold shares. Besides increasing public awareness of their issues, their main tool for creating change is that of the shareholder resolution. These resolutions are proposals for changes in company policy or activity put forth at a company's annual general meeting. They are voted on by the shareholders present, or via proxy votes by those not in attendance, and, if they pass, must be complied with by management. Even when the resolutions fail, though, they still serve to raise awareness of the issues among shareholders and thereby put more pressure on management to do something.

A third type of social investing is that of community development. Also referred to as alternative investing, it centres around the idea of promoting the local economy by investing in local enterprises. Housing, job creation, and meeting local social needs are the primary aims here.

It is important to note that while ethical considerations are a major factor in deciding which companies to invest in, prudent social investors will always carefully scrutinize potential investments for financial performance as well. There is no reason why screening investments should result in lower rates of return than for non-screened investments.

The field of social investment is rapidly growing. The last ten years has seen a proliferation of organizations emerge to both create and meet the increasing demand for this kind of service. A recent study announced that screened investments have now topped the $1 trillion dollar in the US alone.

"Nearly one out of every 10 dollars under management in the U.S. today is part of a responsibly invested portfolio. A total of 710 major investing institutions (including pension funds, mutual fund families, community development funds, and foundations) were found to be involved in socially responsible investing in one way or another with assets totaling $1.185 trillion. This broad figure accounts for roughly 9 percent of the $13.7 trillion in investment assets under professional management in the U.S., according to the 1997 Nelson's Directory of Investment Managers."

Players in the Social Investment Community:

This section will describe, and gives examples of, the kinds of organizations that are engaged in SRI activities, differentiating between core and affiliated organizations, depending on primary work focus.
Core Organizations
National Trade Associations

National trade associations in the field of socially responsible investment are organizations that exist primarily to advance the field as a whole, serving as focal points for the industry. Though the organizations in this category in the field of social investment do not refer to themselves as 'trade associations', or even necessarily limit themselves geographically, they in essence perform such roles. They prefer to call themselves, more innocuously, forums and organizations, and sometimes, in a more generic sense, networks. This may be due to the fact that their membership is open to anyone, and is not limited to corporations operating within the field. However, they all tend to provide special services for their professional members.

Their main functions are networking (i.e., bringing people together who share common interests, and ensuring those people are kept informed of the latest issues, ideas and activities), research, promotion and advocacy.

The three national trade association described below are the Social Investment Organization (SIO) in Canada, the Social Investment Forum (SIF) in the United States, and the UK Social Investment Forum (UKSIF) in the United Kingdom.

The Social Investment Organization (SIO) in Canada

"Established in 1989, the Social Investment Organization (SIO) is a national non-profit organization dedicated to the advancement of a socially and environmentally sustainable society through socially responsible investment (SRI) and corporate social responsibility (CSR).

The SIO believes that all investment decisions have social implications. The incorporation of social and environmental values into our investment decisions will have positive impacts on our communities, our environment, and our society.

The SIO believes that business enterprises large and small also bear responsibility to our society beyond the marketplace. The fate of the corporation is intimately connected to the well-being of its employees, the communities they inhabit, and the society in which they participate.

The SIO believes that investment and business can provide critical links in the effort to develop a more socially and environmentally sustainable society.

…The SIO supports a diverse range of programs and initiatives to further advance the development of SRI and CSR. These include:

Research Organizations

Although most of the organizations and individuals involved in SRI can be said to be in research mode insofar as it requires ongoing learning to keep abreast of developments in this constantly evolving field, there are certain organizations that focus specifically on research and analysis, particularly on how corporate operations measure up to specific SRI screens, and on SRI issues. Professional investors often rely on their findings as a basis for investment decisions.

Two of the more salient agencies include The Investor Responsibility Research Center in the US, and the Ethical Investment Research Service in the UK.

The Investor Responsibility Research Center

"The Investor Responsibility Research Center (IRRC), is an independent, not for profit, research firm founded in 1972. We are the world's leading provider of impartial research on proxy voting, corporate governance, and corporate social responsibility issues. Institutional investors rely on IRRC to assist them with their independent investment decisions. IRRC's professional staff provides research and analysis, software products, consulting and portfolio screening services to more than 400 subscribing institutions. IRRC's research and expertise also serve governments, corporations, law firms, boards of directors, boards of trustees, the media and others seeking independent analysis of the issues shaping corporate decision making and investment trends."

The Ethical Investment Research Service

"The Ethical Investment Research Service (EIRIS) is a registered charity which was established in 1983 with the help of a group of churches and charities. They all had investments, and strong convictions of what they thought was right and wrong. They needed a research organization to help them apply their ethics to their investments.

EIRIS has the following aims:

General SRI Resource Organizations

There are several excellent examples of general SRI resource organizations in the United States, which not only do research but also provide a wide range of other services. Three such organizations are: the Council on Economic Priorities, KLD - Kinder, Lydenberg, Domini & Co., and Franklin Research & Development. The following overviews of them have been excerpted from an article from the GreenMoney On-Line Guide.

Council on Economic Priorities (CEP)

"Alice Tepper Marlin founded this nonprofit public interest organization to research corporate social responsibility in 1969.
CEP publishes corporate reports, gives yearly corporate responsibility awards, started the Campaign for Cleaner Corporations and provides corporate social responsibility research for investors. CEP also provides Global corporate ratings, News Update Service, Corporate Environmental Data Clearinghouse (CEDC).

CEDC gathers and analyzes information on environmental policies and performance of individual corporations using a wide variety of researchers. CEP has SCREEN information reports providing the investment community with concise, comprehensive and unbiased information on a range of social and environmental issues. The SCREEN service also offers International Corporate Ratings - using its ties to similar organizations in other countries including the United Kingdom, Germany and Japan. This provides a truly global perspective to its corporate social responsibility research.
Each company's social performance is objectively measured in eleven issue areas summarized in CEP's unique rating system. Company performance is monitored throughout the year with changes noted in quarterly reports.

All of CEP's information covers a variety of issues: