By Lisa Woll, CEO of US SIF
What’s in a name? ESG, Ethical, Green, Impact, Mission, Responsible, Socially Responsible, Sustainable and Values are all labels that investors apply today to their strategies to consider environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact. While the variety of labels can sometimes be confusing, the core message is clear. A growing number of investors, institutions and financial professionals are deploying and managing capital to build a more sustainable and equitable economy.
This year’s Trends Report is an exciting milestone, marking the 10th edition of the biennial report, the first of which was released in 1995. The sustainable, responsible and impact investing (SRI) industry has made significant advancements over these years, and this report has tracked its evolution and growth.
Some of the developments you will find in this report include:
• Conventional investment firms are increasingly active in creating and marketing targeted products for sustainable investors. In recent years they have launched a variety of ESG-themed funds, created new staff positions for senior sustainable investment professionals and dedicated other resources to advance the field. Today, there is no longer any “typical kind of firm” engaged in sustainable investment.
• The expansion of sustainable, responsible and impact investing is found across all asset classes. This report details, for example, the marked expansion in the issuance of “green bonds” and the continued growth in alternative investments engaged in responsible investment.
• Foundations have deepened their practice of mission investing—using a variety of strategies to create positive social impact aligned with their mission. Extensive examples are covered in the US SIF Foundation’s 2014 report Unleashing the Potential of US Foundation Endowments: Using Responsible Investment to Strengthen Endowment Oversight and Enhance Impact.
• Two developments of note since the last Trends report in 2012 are the emergence of the fossil fuel divestment movement and the adoption of policies restricting investments in firearms in the wake of the Sandy Hook Elementary School shooting.
• Other emerging trends featured in this report are the perspectives of millennials on sustainable investing, investment products geared towards advancing women, crowd funding as a tool for ESG investors, and place-based investing.
• The sustainable investment community has engaged the federal legislative and executive branches of the US government as another avenue to help create the conditions for a global sustainable economy. Some of our community’s work in this arena is highlighted in this report, including addressing climate change and calling for better corporate disclosure on political contributions, executive compensation, use of conflict minerals and payments to governments by extractive companies. These efforts help to create a national framework in which environmental, social and governance considerations in investing are able to become the norm.
We hope US Sustainable, Responsible and Impact Investing Trends 2014 motivates you to explore this field or to expand your responsible and impact investing strategies.
Please visit www.ussif.org for more information on our work.
Article by Lisa Woll, who has served as the CEO of US SIF and the US SIF Foundation since 2006, and has been responsible for strategic planning, developing a robust policy presence, expansion and diversification of funding, launching our national conference and creating the Center for Sustainable Investment Education.
Prior to US SIF, Lisa was executive director of the International Women\’s Media Foundation, an organization focused on press freedom and expansion of women’s role in the media. During her tenure, the IWMF played a significant role in re-orienting the way journalism training was carried out on the issues of HIV-AIDS, malaria and TB in several African media organizations. Lisa also spent a decade working on children’s human rights. She was the director of the first international study to look at the impact of the Convention on the Rights of the Child and directed the Washington, DC office of Save the Children. She is a member of the Advisory Council of the Children’s Rights Division of Human Rights Watch.
This article was originally published in the Report on US Sustainable, Responsible and Impact Investing Trends 2014 from the US SIF Foundation.
