Socially responsible investments (SRIs) have always been a tough sell, due to the wary public's (unsubstantiated) notion that ethics and profits are incompatible. Barbara Krumsiek offers her predictions for social investments for the next decade in GreenMoneyJournal.com.
Krumsiek expects that such investments will become much more desirable as truths about businesses such as Enron come to light, and as we look increasingly to the world at large and how our actions affect the lives of others and in turn, our own.
"Social investing has addressed this fragility for decades, and in thatrespect, I am confident we are contributing to solutions, not adding to theturmoil," Krumsiek writes. "Human dignity, the right to a fair workplace, and environmental performance have long been at the root of social investing."
These specifications, according to Krumsiek, will lead to growth in assets and influence in socially responsible companies, thereby easing the public's hesitancy to make such investments. This will discredit the "either/or myth" that ethical and financial performances are mutually exclusive, compelling people to invest in successful but harmful companies.
In addition, Krumsiek sees a rise in SRI funds' focus on community investments (where mutual funds invest a percentage of assets into "communities underserved by traditional financial institutions") and more growth and awareness globally for the need for SRIs: "Outside the U.S., SRI is more commonly known as "investing for sustainability," reflecting the fact that environmental concerns have been the key driver of investment screens. Now, as the UN has published its Global Compact--"pillars required to sustain the new global economy and make globalization work for all the world’s people"--pressure is building for broadened social screening." --Julie Madsen Go there>>