US Socially Responsible Investment Shows Significant Growth

Friday, 03 December 2010
By Susan Drury

Despite the recession US socially responsible investment (SRI) is thriving, up 13%. The use of ESG criteria, shareholder advocacy and community investing, has grown more swiftly than the overall investment universe due to factors such as net inflows into existing SRI products, new SRI product developments and the adoption of SRI strategies by managers and institutions not previously involved in the field, according to the Social Investment Forum Foundation’s 2010 Report on Socially Responsible Investing Trends in the United States.

Currently nearly one in eight dollars under professional management in the US, 12.2% of the $25.2 trillion in total assets under management tracked by Thomson Reuters Nelson, is involved in some type of SRI.

The total value of assets managed under policies that explicitly incorporate ESG criteria into investment analysis and portfolio construction are valued at $2.51 trillion, of these ESG assets $691.9 billion have been indentified within specific investment vehicles managed by money managers, while at least $2.03 trillion were identified as owned or administered by institutional investors. Of the institutional ESG assets, $206.3 billion were managed through investment vehicles captured in research on money managers. The assets and numbers of fund vehicles tracked as incorporating ESG criteria rose 90% since the 2007 Social Investment Forum study and their assets increased 182 % from $202 billion to $569 billion.

“Socially responsible and sustainable investing emerged from the recent financial crisis doing better than the overall market in terms of holding onto assets and attracting new investments. What is significant about this strong growth is that it encompasses both retail investors, including SRI mutual funds, and institutional investors, who hold the majority of SRI investments. We have also seen robust expansion of the strategies of shareholder advocacy and community investing. All of these developments show that the key principles of socially responsible and sustainable investing are being more widely embraced. All signs point to more investors looking for investments that support good governance and greater transparency and disclosure on ESG issues,” said Lisa Woll, CEO of the Social Investment Forum.

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