SRI in the Rockies: round-up

The buoyant mood of the SRI in the Rockies conference was deflated somewhat by the announcement that Joan Bavaria, founding president and chief executive of Trillium Asset Management and one of the leading figures of the US SRI movement, is seriously ill. Joan, who co-founded the US Social Investment Forum in 1981 and went on to become founding chair of Ceres, the US environmental investor coalition, was also known internationally for the Joan Bavaria Award for impact in building sustainability into the capital markets. In November, 1999 Joan was lauded as “Hero for the planet” by Time.com and has been presented with many other awards including the City of Göteborg International Environment Prize in 2004. We wish her well.
At the conference, the annual Moskowitz Prize, the only global award recognizing outstanding quantitative research in the field of socially responsible investing (SRI), was this year awarded to Meir Statman of Santa Clara University for a paper titled: The Wages of Social Responsibility.
Launched in 1996 by the US Social Investment Forum,the Moskowitz Prize is named after Milton Moskowitz, one of the first investigators to publish comparisons of the financial performance of screened and unscreened portfolios. Statman’s winning study for 2008 is a fascinating piece of research based on data from KLD, the US SRI index provider, which, paraphrasing significantly, looks in part at under performance issues with ‘shunned’ or screened stocks. Statman said that as prices are depressed by sellers of sin stocks so the potential for outperformance of these same stocks rises. He said, however, that there are cancelling effects within the selection process for SRI portfolios such as attention to labour rights, community relations, training, diversity and good environmental records that mean these companies can perform better than other stocks.
The US Social Investment Forum says it is lobbying US senators on Capitol Hill to try and get an SRI module included in the funds options available under the Thrift Savings Plan, a retirement savings plan for civilians employed by the United States Government and members of the uniformed services.