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Socially Screened Assets Grew 1.5 Times Faster Than all U.S.Managed Portfolio Assets Since 1999

Published 11-28-01

Submitted by US SIF: The Forum for Sustainable and Responsible Investment

The market may be in a slump, but socially responsible investing is growing at a strong rate. Assets in socially screened investment portfolios under professional management rose by more than a third from 1999 to 2001 to top the $2 trillion mark for the first time ever, according to the Social Investment Forum's 2001 Report on Responsible Investing Trends in the United States, a study released today. The 36 percent growth rate is over 1.5 times the 22 percent rise reported for all investment assets under professional management in the United States during the same two-year period.

The Forum's 2001 Trends Report found that total assets under management in portfolios screened for socially concerned investors climbed from $1.49 trillion in 1999 to $2.03 trillion in 2001. The portfolios include socially screened mutual funds and separate accounts managed for socially conscious institutions and individual investors. According to the 2001 Nelson's Directory of Investment Managers, there is a total of $19.9 trillion in professionally managed investment assets of all types in the United States, compared to $16.3 trillion in 1999.

Steve Schueth, spokesperson for the Social Investment Forum and president of First Affirmative Financial Network said: "This data would be remarkable at any point in time, but it is particularly striking when you realize that we had bearish markets for most of the time period covered by this study. Defying conventional thinking, social investing has grown considerably over the past two years. This speaks volumes about the staying power of this industry and about the commitment of socially conscious investors to the dual objectives of making money and making a difference."

Alisa Gravitz, executive director of the consumer and investor education nonprofit Co-op America added: "Social investing is a powerful concept - investors can invest for their own futures and a better world at the same time. Social investing is working for investors, and that's why they're sticking with it. In these troubled times after the horrible terrorist attacks, it is more important than ever to have your assets working for a better future. More and more investors are becoming social investors to be a part of the solution."

KEY TRENDS REPORT FINDINGS

Additional findings of the Social Investment Forum's 2001 Report on Socially Responsible Investing Trends in the United States include:

* Over $2.3 trillion resides in professionally managed portfolios utilizing one or more of the three strategies that together define socially responsible investing in the U.S.- screening, shareholder advocacy, and/or community investing. By this broader measurement, socially and environmentally responsible investing in the United States grew 8 percent from $2.16 trillion in 1999 to $2.34 trillion in 2001.

* Nearly one out of eight dollars under professional management in the United States today is involved in socially responsible investing. The $2.34 trillion being managed by major investing institutions (including pension funds, mutual fund families, foundations, religious organizations and community development financial institutions) for socially concerned investors accounts for nearly 12 percent of the total $19.9 trillion in investment assets under management in the U.S.

* Assets in separate accounts managed for institutional clients and individual investors grew by nearly 40 percent from 1999 to 2001. These socially screened private portfolios rose to $1.87 trillion in 2001 from $1.343 billion in 1999, from $433 billion in 1997, and up from just $150 billion in 1995.

* There are now 230 mutual funds in the United States that incorporate social screening into the investment process. In 1999, 168 socially screened mutual funds were identified, while 230 such funds were recorded in 2001. (This number does not include multiple share classes of the same fund.) Due to the sustained market downturn, the assets of socially screened mutual funds were flat: $153 billion in 2001 and $154 billion in 1999.

* Tobacco is the most widely used screened in screened portfolios. Other broadly utilized screens include weapons; human rights; employment/equality; alcohol; the environment; and gambling.

* Assets are up nearly twofold for socially aware investors using both screening and shareholder advocacy to encourage greater corporate responsibility. Assets in portfolios utilizing both strategies grew from $265 billion in 1999 to $601 billion in 2001. Most of this substantial increase was due to the fast-rising number of major institutions that are both screening for (or divesting themselves of) tobacco stocks in addition to undertaking some form of shareholder activism.

* More than $900 billion in investment assets are leveraged through shareholder advocacy. Institutions and mutual fund families used the power of their $906 billion stake in corporate America to sponsor or co-sponsor proxy resolutions on social issues. Despite the extended slump in the stock market, the $906 billion was nearly equal to the $922 billion in total social shareholder activism reported in 1999.

* Community investing grew by 41 percent between 1999 and 2001. Assets held and invested locally by community development financial institutions (CDFIs) based in the United States totaled $7.6 billion in 2001, up from $5.4 billion in 1999.

SPONSORS OF THE FORUM REPORT

The 2001 Trends Report was made possible by support from: Calvert Group, Elizabeth Laurienzo, 301-657-7047; Capital Missions Company, Susan Davis, 262-642-8753; Christian Brothers Investment Services, Inc., Francis G. Coleman, 212-490-0800 ext. 117; Citizens Funds, Val Dingle, 603-436-5152; Co-op America, Todd Larsen, 202-872-5310; Domini Social Investments, Sigward Moser, 212-217-1110; The Dreyfus Corporation, Lincoln Carnam, 212-922-6292; First Affirmative Financial Network, LLC; Steve Schueth, 303-998-1141; Friends Ivory & Sime, plc, Karina Litvack (karina.litvack@friendsis.com); FTSE Americas Inc., Michael Gormley, 212-825-1337; Green Century Funds; Mindy Lubber, 800-934-7336; KLD Research & Analytics, Inc., Anjali Gupta, 617-426-5270; Lincoln Capital Management, James Lincoln, 480-488-8690; Miller/Howard Investments, Inc., Lowell G. Miller, 845-679-9166; Neuberger Berman Socially Responsible Investment Group, Ingrid S. Dyott, 212-476-5908; Pax World Funds, Anita Green, 888-869-9672; Progressive Asset Management, Inc., Neil Stallings, 800-786-2998; ShoreBank, Jean Pogge, 773-420-4672; Social Investment Research Service, Suzanne Fallender, 301-545-4555; and Trillium Asset
Management, Joan Bavaria, 617-423-6655.

ABOUT THE SOCIAL INVESTMENT FORUM

The Social Investment Forum is a national nonprofit membership association dedicated to promoting the concept, practice and growth of socially and environmentally responsible investing. The Forum's membership includes over 500 social investment practitioners and institutions, including financial advisers, analysts, portfolio managers, banks, mutual funds, researchers, foundations, community development organizations and public educators. The Forum provides cutting-edge research on trends in social investing, provides the nation's most comprehensive directory of practitioners in the field, and publishes a monthly Mutual Fund Performance Chart on its website, located at www.socialinvest.org. Background information about the Forum, including the text of its Report on Responsible Investing Trends in the United States, may be found at www.socialinvest.org. The Forum's Guide To Socially Responsible Investment Services is also available to the public at its website. For a copy of the Guide, send $2.00 to: Social Investment Forum, 1612 K Street NW, Suite 650, Washington, DC 20006.

US SIF: The Forum for Sustainable and Responsible Investment Logo

US SIF: The Forum for Sustainable and Responsible Investment

US SIF: The Forum for Sustainable and Responsible Investment

The Social Investment Forum (SIF) is the only national membership association dedicated to advancing the concept, practice, and growth of socially and environmentally responsible investing (SRI). Our members integrate economic, environmental, social and governance factors into their investment decisions and SIF provides programs and resources to advance this work. SIF's membership includes more than 500 social investment practitioners and institutions, including financial professionals, analysts, portfolio managers, banks, mutual funds, researchers, foundations, community development organizations, and public educators.

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