Posts Tagged ‘SRI’

The Calvert Social Index is…

Wednesday, October 6th, 2010

The Calvert Social Index is a stock market index of companies that are considered socially responsible. It was created by Calvert Investments and uses Calvert’s social criteria to determine whether a company is socially responsible or not. This criteria relates to the environment, product safety, community relations, international operations, weapons contracting, human rights, and workplace issues. While the number changes frequently, as of August 2010, there were over  650 companies in the index.

A Triple Bottom Line is…

Wednesday, October 6th, 2010

A triple bottom line is when a company takes its environmental, social, AND financial performance into account to assess its overall performance. It takes the idea of a double bottom line (which considers the company’s social impact) one step further to include its environmental impact.

A Double Bottom Line is…

Wednesday, October 6th, 2010

A double bottom line is a way for a company to measure its performance in terms of positive social impact as well as financial success. While a traditional bottom line helps a company understand its financial profits and losses, a double bottom line factors in the greater social consequences to business decisions.

The Global Compact is…

Wednesday, October 6th, 2010

The Global Compact is a United Nations-sponsored voluntary initiative that guides businesses around the world in practicing corporate responsibility. Basically, it’s an effort to make corporations keep their business practices morally upright. The compact is made up of ten principles in the areas of human rights, anti-corruption, labor, and the environment. Through discussion and networking, businesses strive to achieve the goals set down in all ten principles.

The four main components of the Global Compact are:

  • Human Rights: Issues relating to human rights make up the first two principles of The United Nations Global Compact. They basically state that businesses should always protect and support people’s human rights.
  • Labor: These four principles state that businesses should uphold fair and non-discriminatory standards of labor for all of their employees.
  • Environment: Environmental stewardship is the topic of three of the principles in Compact. These principles state that a company should support and promote environmental responsibility in all of its corporate endeavors.
  • Anti-Corruption: The final principal of the Compact says that businesses should work against all forms of corruption, including extortion and bribery.

Shareholder Advocacy is…

Wednesday, October 6th, 2010

Shareholder advocacy is when people who own stock in a company (and therefore technically own part of the company) use their influence to promote corporate responsibility. Basically it means that you use your voice within the company, however small, to encourage the company as a whole to practice policies that are socially and environmentally responsible. Yeah, you can really do that!

Proxy Voting is…

Wednesday, October 6th, 2010

Proxy voting is when someone casts a vote for someone else. If you are a shareholder in a company, you are allowed to vote on certain general decisions made about the company. If you are unable to attend the meeting where the voting takes place, then you might ask someone to be your proxy and submit your vote on your behalf.

Spend Money, Be An Activist?

Thursday, September 24th, 2009

You can affect change in all sorts of ways. But lately, people are using their wallets to make their voices heard.

  • In larger numbers than ever before, consumers are considering the environmental and social aspects of the things they buy – not just the price.
  • Consumer demand has been driving a transformation by traditional companies to become more sustainable, and often more profitable, in the way their operate their businesses.
  • Even though much progress has been made, transparent and authentic sustainable business practices are still not the norm. Increasingly vocal demand by consumers for sustainable products will continue to drive this “revolution” into all areas of business.

Facts & Figures

  • In a TIME poll, 40% of people reported buying a product because of its social or environmental benefits.
  • Socially responsible investment (SRI) funds have increased in number from 55 in 1995 to 260 today – they manage 11% of all money invested in US markets.
  • In 2007, a Goldman Sachs report found that companies that emphasized sustainability would outperform the financial market.

Best Quote

“We have always known that heedless self-interest was bad morals, we know now that it is bad economics.” – President Franklin D. Roosevelt

What’s the difference between regular investing and socially responsible investing?

Wednesday, July 29th, 2009

Socially responsible investing (SRI) is a philosophical approach to investing. While investing typically focuses on only maximizing financial return, SRI also takes into account social considerations when calculating a return. You can think of it as a single bottom line vs. a double or even triple bottom line. SRI looks at financial return, as well as the investor’s impact on society, and the environment.

But SRI isn’t just unique in the way it measures returns – it’s also a distinct approach to the investments themselves. Let’s say you’re in the stock market. With a regular investing mindset, you’d choose companies based on how well they perform – how much money they make. With an SRI mindset, you would look at the company’s financial performance, but also its mission. SRI tends to avoid investing in alcohol, tobacco, gambling, weapons, and military companies for instance. Instead, a socially responsible investor might invest in an alternative energy company or a microfinance institution that is profitable but also directly beneficial for society.

Due to the rising popularity of mixing business and conscience, there are now funds and financial advisors devoted specifically to socially responsible investing.