The Rewards of Socially Responsible Investing
By: Mark Satterfield*
This article is a study of socially responsible investing (SRI) specifically examining the key challenges facing the discipline. SRI is a conscience choice by investors who wish to fulfill their duty to behave ethically and to create the most good for the greatest number. The article concludes that SRI achieves competitive returns versus its non-SRI peers.
Amy Domini, a pioneer in Socially Responsible Investing (SRI), believes that investors can individually make a difference in the way that business is conducted and thereby make the world a better place by choosing investments that abide by a certain set of values. She quotes Rosa Parks, “I can’t think of anything more important to teach young people today than this: that ordinary people working together can change history. They can look for a new Martin Luther King or Rosa Parks or Malcom X to tell them how to make a difference—but they can also look in the mirror”.[1] Domini defines SRI as “the desire to align investments with values and the desire to play a role in creating positive social change”.[2] SRI “has been explosive sine the late 1990s in the United States”.[3] According to the Social Investment Forum’s 2010 report, “at the start of 2010, professionally managed assets following SRI strategies stood at $3.07 trillion, a rise of more than 380 percent from $639 billion in 1995”.[4] This boom in SRI suggests that more investors are demanding that companies in which they invest behave ethically and in a socially responsible manner.
* Mark Satterfield works as an Internal Audit Manager at Euronet Worldwide, Inc.
