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July 25, 2003
Survey Finds SRI Fund Managers See Bright Future in Europe
    by William Baue

A recent survey of fund managers conducted by UK Social Investment Forum and Thomson Extel reveals high expectations for significant SRI growth in Europe. Those surveyed also ranked top SRI firms and analysts.

Earlier this month, the UK Social Investment Forum (UKSIF) announced the results of its first survey on socially responsible investment (SRI) in Europe, conducted by Thomson Extel, a division of Thomson Financial. The survey found that more than 91 percent of the 105 responding SRI fund management firms running SRI-related funds expect their involvement in the SRI market to increase. The fund managers were predominantly from the United Kingdom (44 percent), with smaller percentages from continental Europe. A few fund managers from North America (four percent) and the rest of the world (two percent) that run SRI-related funds that hold European stocks were included.

The survey also ranked the best brokerage firms for SRI analysis and reports as HSBC Securities first and then Dresdner Kleinwort Wasserstein (DrKW), and reversed the order for SRI news service providers. WestLB Panmure placed third in both of these categories.

"As the clear leaders in the brokerage community for SRI-related news and analysis, HSBC and Dresdner Kleinwort Wasserstein are ideally placed to capitalize on the rapidly growing demand from investors for news, views, and research about material social and environmental issues," said Helen Wildsmith, executive director of the UKSIF. The UKSIF was founded in 1991 to promote SRI through the integration of material social, environmental, and ethical issues into standard investment practice.

Independent financial advisers rated Morley Fund Management, Henderson Global Investors, and Jupiter Asset Management as the top three buy-side firms for understanding SRI issues, according to the survey. The survey also ranked Mark Tyrell of HSBC, Miles Packman of DrKW, and Astrid Emmerich of Credit Suisse First Boston as the top three individual analysts for SRI analysis or sales service.

The survey's top-rated sell-sides analysts for integrated SRI analysis were Ben Yeoh of HSBC's pharmaceuticals analyst, and Alastair Bishop and Andrew Hollins, DrKW's capital goods and metals and mining analysts, respectively.

"The increasing integration of SRI into sell-side analysis is really exciting, and indicates how far SRI has advanced in the UK over the last decade," said Tessa Tennant, chair of both the Carbon Disclosure Project and the Association for Sustainable & Responsible Investment in Asia (ASrIA). Ms. Tennant, who chaired the UKSIF from 1993 to 1997, presented awards to the top-ranking firms and individuals at UKSIF's summer reception earlier this month.

In addition to ranking SRI firms and analysts, the survey gauged firms' plans about SRI and attitudes toward corporate social responsibility (CSR). The survey asked respondents to rate, on a scale of one (strongly disagree) to five (strongly agree) the reasons why companies address social and environmental issues. More than 80 percent of respondents strongly agree (four and five) that it is "to assist brand value and reputation."

However, almost half (48 percent) of respondents strongly agree that companies' involvement in CSR is "to pay lip service to public concerns." More than 41 percent of respondents strongly agree that it is "to increase appeal to investors." Fewer (almost 32 percent) strongly agree that it is "to reduce costs and/or liabilities."

The majority (almost 52 percent) of 105 fund management firms surveyed devote only up to two percent of total broker commission to SRI, with a little more than 12 percent of the firms devoting more than five percent to SRI. However, almost three quarters (71 percent) of all respondents expect to increase the portion of broker commissions devoted to SRI in the coming year.


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