GreenMoney: 2014 Outlook for Socially Responsible Investing (SRI)


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2014 Outlook   

for Socially Responsible Investing (SRI) 

by Amy Domini, Founder & CEO of Domini Social Investments    

What lies ahead for responsible investors during 2014? Certainly new products, particularly those that are cleaner or more local, certainly a more predictable stock market, and probably enhanced interest in the value added by utilizing social and environmental considerations when choosing investments. These trends are already evident. Each is good news for the ethical investor.  

 

When Corporations Rule the World, Second Edition by David C. Korten was published in 1995, it was rightly viewed as a challenge to buy local, take personal responsibility for sustainability and to invest at least part of your assets into smaller local businesses. The call was powerful and spoke to something in the psyche. It put into words the unease so many had been feeling and gave a blueprint for action.  

 

Since that time the Slow Money movement has put a voice to one aspect of the sustainability effort. It asks us to invest one percent of our assets into businesses that are small and geographically close to us, businesses that enhance life as a core mission. The first beneficiary seems to be the sustainable agriculture field, with dozens of options springing up. In my home region of New England we see the gamut from a small organic pickling company to an integrated farm-to-table network.  

 

Sustainable agriculture has re-introduced an old concept to many. Rather than investing in exchange for ownership in a company, many investors are investing in exchange for a part of the revenues that the business generates. This has the dual benefit of leaving ownership with the entrepreneur and giving the investor a potential for superior returns. It is a common form of reward in starting a restaurant or making a film, but relatively new in its current use as part of the sustainability trend.  

 

The desire for more direct and useful products has, in recent years, led institutional and ultra-wealthy investors to purchase venture capital funds that promise to seek out and invest in segments of the sustainability market, like clean land or hydro-culture, solar power or bottom-of-the-pyramid wealth creation. But these investment vehicles demand long-term commitments with no liquidity. That isn’t for everyone.  

 

Domini Social Investments has, therefore, launched Nia Global Solutions, an equity portfolio that seeks to bring these concepts into the public market. In seeking the very most impactful companies, meeting the very toughest sustainability questions, we started with our own basic universe of 2,800 companies. Only three worked for Nia. We now have a pool of about 43 to work with in managing the portfolio.  

 

This is likely to be a big new effort in the socially responsible investing world. Bringing the concepts of high impact investing into the public equity setting is filled with challenges, but the industry has long heard the call from investors for something cleaner and more consistent with personal values than what they’ve seen to date.  

 

READ AMY’S FULL ARTICLE

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Welcome to our second monthly eJournal, which features long-time SRI leader Amy Domini of DSI and her 2014 Outlook. It also includes Donna Katzin of Shared Interest discussing their remarkable work in South Africa over the last 20 years. See additional articles online. Next Month, look for our coverage of the 2014 State of Green Business Report from GreenBiz.

As we continue in year 21, please know that we reflected a great deal about our decision to end our print editions and go completely digital. Bottom line, there are so many important sustainability stories we want to report on; being digital allows us the flexibility to increase both frequency and distribution (now over 25K).

The digital world has its problems too, as we discovered a slight technical glitch in the January eJournal. It occurred in the featured article by Joe Keefe of PaxWorld. Read Joe’s complete article here.

In closing, remember to do business with our sponsors. We are grateful to you and to them for the many years of support,

 

Cliff Feigenbaum,  Founder,  Green Money 

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