July 29, 2002
Conference to Consider the Business Case for SRI
by William Baue
Institutional investors will discuss SRI at the Green Mountain SRI Summit, to be held in Stowe,
Vermont in September.
In the post-Enron world of corporate governance scandals, investors are searching for ways to
identify risk. Socially responsible investing (SRI) represents one such strategy. SRI assesses a
company's social, environmental, and corporate governance performance, and various studies have
shown that these factors correlate with financial performance. Investors who wish to inform
themselves about all aspects of socially responsible investing, from screening and shareowner
advocacy to environmental, faith-based, and community investing, will be able to do so at the
upcoming Green Mountain SRI Summit.
"In light of the wave of scandals, the Green Mountain SRI Summit provides an
opportunity for socially concerned investors to discuss in detail some of the urgent issues facing
us," Social Investment Forum (SIF)
President Timothy Smith told SocialFunds.com.
The summit will take place September 8 to
10, 2002 in Stowe, Vermont. Information Management
Network (IMN), global organizers of institutional finance and investment conferences, will
produce the summit. Green Century
Funds, Vermont Business for Social
Responsibility (VBSR), and SRI World Group are providing assistance in holding the summit.
On the Sunday afternoon before the official opening of the conference, institutional investors
will gather to discuss why and how they can apply SRI strategies to their portfolios. Peg O'Hara,
the managing director of the Council of Institutional
Investors (CII), will moderate the first session. CII does not address social issues, but it
publicly supports the notion of corporate social responsibility. In September 2001, the Council
voted unanimously to add a corporate responsibility policy to its corporate governance policies.
"The Council believes that the promotion, adoption and effective implementation of
guidelines for the responsible conduct of business and business relationships are consistent with
the fiduciary responsibility of protecting long-term investment interests," the policy reads.
SRI advocates have long held that good corporate citizens are more likely to perform
better financially than their average or below average peers. This was supported recently by the
one-year results of the Triple Bottom
Line Simulation. In the Triple Bottom Line Simulation, institutional treasurers have been
simulating the investment of $100 million in five different, 100 percent SRI portfolios. The
one-year results, announced in June 2002, revealed that three of the five portfolios outperformed
While academic studies have shown a correlation between good social and
environmental performance and good financial performance, they have yet to show a causal
relationship. Nevertheless, a link has been established. Incorporating social and environmental
performance assessment into the investment process may eventually be viewed as fulfilling fiduciary
The $20 billion Connecticut Retirement Plans and Trust Funds (CRPTF) operate
from this position, as explained by their Assistant Treasurer for Policy Meredith Miller.
"The bottom line is that if a public fund does its due diligence, taking into account and
understanding that the social, environmental and economic implications of investments have an
impact on the financial bottom line, . . . then we believe it's possible to not only pursue your
fiduciary duty, but that it's part of your fiduciary duty," said Ms. Miller, who is a panelist on
Sunday's second session.
"Frankly, this summit will be valuable because there will be
in-depth discussions about academic and practitioner data concerning how corporate responsibility
practices add to the financial bottom line," Ms. Miller concluded.