September 07, 2012
Opinions Differ on the Future of Sustainable Investing
by Robert Kropp
Industry veterans weigh in on likely developments over the next twenty years, and their opinions
range from optimism to concern.
I noted in the second of two articles covering the upcoming SRI Conference on Sustainable, Responsible, Impact Investing
that one important session will feature the top executives of three major sustainable investment
firmsóBoston Common Asset
Management, Calvert Investments, and Pax World Managementódiscussing the future of
Assessing the future of sustainable investment appears to be
very much on the minds of several veterans of the industry, as the Fall 2012 issue of Green Money Journal
demonstrates. In an article entitled Relevance
Achieved, Amy Domini of Domini Social
Investments commends sustainable investors for their successful campaign to pressure
corporations into issuing sustainability reports. What was a rare occurrence 30 years ago is now
practiced by more than 80% of companies, she writes.
As a result, regulators are now more
willing to mandate that companies report on issues such as greenhouse gas (GHG) emissions, asset
managers are increasingly considering environmental, social, and corporate governance (ESG) factors
in their investment analysis, and academics are reporting more and more examples of outperformance
by leading sustainable firms.
"As society sees the full cost of traditional business
behavior," Domini concludes, "SRI (socially responsible investing) will be embraced as the single
most important lever towards building a better world than the planet has ever seen."
things stand in 2012, however, the fact remains that sustainability is failing to keep up with
global over-consumption, and the mainstream capital markets continue to prioritize short-term
financial results. Contrasting the growth capitalism still dominant today with sustainable
capitalism, Joe Keefe of Pax World writes, "The sustainable
investment community's role is vital because the fundamental struggle is between a long-term
perspective that fully integrates ESG factors into economic and investment decisions and our
current paradigm which is increasingly organized around short-term trading gains as the primary
driver of capital investment and economic growth regardless of consequences/externalities."
"We need to be more ambitious in our agenda," Keefe continued, arguing that sustainable
investors must advocate "against economic and investment approaches that ignore ESG concerns,"
advance gender equality, and engage with policymakers in critically important initiatives such as
public funding of federal elections.
Robert Zevin, the founder of Zevin Asset Management and a pioneer in the field of socially
responsible investing, takes a distinctly historical approach, writing, "We cling to the
idea that ESG investing is a formula for making money."
"Putting ESG on the same shelf
with Growth and Value," he argues, "Seems to have taken it off the shelf that SRI shared with
advocacy, demonstrations and political action."
Referring to his firm's early statement of
support for the Occupy movement, Zevin observed that many in the sustainable investment industry
commended him for his "courage". He writes, "Apparently the idea that our core purpose is to make
money rather than change society, has caused our former movement to feel in many instances more
aligned with Wall Street than its occupiers."
"My earnest hope is that as social investors
we can be at the forefront of an effort to move reasonable human values of equality,
sustainability, peace and love, back closer to the middle of our work, our lives and our society,"
Zevin concludes, "And that we can wholeheartedly declare our independence from the rest of the
investment industry, with its sorry record of deception, self-enrichment and ill-served clients."
Zevin will also be speaking at next month's SRI Conference. "On the evening before the
conference begins, those who arrive will be invited to a special presentation by Robert Zevin,"
Steve Schueth, President of First
Affirmative Financial Network and producer of the conference, told SocialFunds.com.
Keefe will also be present at the conference, representing Pax World in the aforementioned
discussion of the future of sustainable investing.