Thousands of starfish washed ashore. A little girl began throwing
them in the water so they wouldnt die. Dont bother
dear, her mother said, it wont make a difference.
The girl stopped for a moment and looked at the starfish in her
hand. It will make a difference to this one.
This story, which I
first read on one of the opening pages of Amy Dominis latest
book, Socially Responsible Investing: Making a Difference and
Making Money, has stayed with me for days. For such a brief
tale, it delivers a powerful message about the significance of each
individual actionand the importance of staying the course
of ones principles even when obstacles seem insurmountable.
In light of recent corporate scandals and the subsequent rollercoaster
rides taken almost daily by the stock market, many socially responsible
investors may be doubting their decisions to invest in their principles.
It may be, though, that socially responsible investors are actually
the ones who hold the silver lining to the economic cloud that hangs
According to Lipper Analytical Services data released at the
end of July by the non-profit Social Investment Forum (SIF), socially
responsible mutual funds had their assets increase by three percent
between January to June 2002, while U.S. diversified funds experienced
a 9.5 percent decrease in total assets. Data from Lipper also shows
that in June 2002, an especially tumultuous period in which the
S&P 500 lost over 13 percent, socially responsible mutual funds
benefited from net inflows of $47 million, while U.S. diversified
funds suffered from net redemptions to the tune of nearly $13 billion.
This data appears to confirm that there really is something
to the anecdotal reports we are hearing about the ongoing market
scandals spurring new people to join the ranks of socially responsible
investing, said Steve Schueth, spokesman for the SIF and president
of First Affirmative Financial Network. One might say that
the social investment industry is defying gravity at the moment.
And it may continue to in the long-run, says Domini.
Were entering an era in which government regulators
and individual investors will be digging deeper into the activities
of corporations, she commented in a recent news release. What
they find will have an impact on companies profitability and
share price. We believe that social and environmental issues pose
material risks and opportunities to investors, and that companies
with stronger social and environmental profiles are better prepared
for long-term sustainability and profitability.
This is good news for enlightened corporations that have placed
a high priority on sustainable development. The numbers above further
validate the business case that it is indeed possibleand,
in fact, maybe even highly probableto do well by doing good