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Is SRI too defensive about shortcomings?

Quite a few people think so, judging by the comments on the KLD blog and on Twitter today.

KLD, one of the leading US ‘socially responsible’ investment houses in the US, makes some salient points in its own defence on the link above.

But this does not excuse the short sightedness of many of the other SRI folks.

(Continues below)

                                                                                                  SRI in the US: Hiding behind tradition?

Our columnist Jon Entine, a long time critic of US SRI as too blinkered, (but good friends with KLD’s Peter Kinder, who is a great guy) has made a few enemies in the industry, but continues to write on the shortcomings of so-called socially responsible investing. Here’s another link to one of his pieces.

Two more are here, and here.

For the latest debate, read this piece first, by Timberland’s CEO Jeff Swartz, then the KLD response, and consider the below whilst doing so, quoted from Jeff’s recent, well argued article:

“There are more than 260 socially-screened mutual fund products in the U.S. currently, compared with just 55 SRI funds in 1995…

…Starbucks–widely regarded as a CSR leader–gets delisted from CSR funds because its product offerings include alcohol. Meanwhile, companies that pass the screen (“dry” companies, I guess) get to stay on the list…”

“We’ve earned a decent reputation as sustainable business and responsible brand … and yet SRIs only hold about one percent of our shares…”

For the full article on how SRI might work better, go here.

This is a debate that needs a LOT more airtime. We’ll be publishing more on it in our magazine in the coming months.

1 Comment

  1. Looking forward to more information and analysis on this subject. I agree with Jeff Swartz, shareholders and socially responsible investors do not seem to be taking CR efforts seriously enough (and Board members too?). Also, the comment on KDL's blog is interesting. "Investors like me don’t care so much about companies investing in so-called 'CSR programs,' many of which aim to do a little less bad and minimize risk." I hope he/she is wrong–a bummer for all the companies with effective programs. Maybe SRI's need to look into what is actually happening out there in the CR trenches?

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