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Corporate Social Responsibility (CSR) is an idea that corporations have to consider the interests of customers, employees, shareholders, communities, and ecological considerations in all
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Socially responsible investing (SRI) describes an investment strategy which combines the intentions to maximize both financial return and social good.
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green@work : Magazine : Between Blue & Yellow : Sept/Oct 2002

 

Between Blue and Yellow
A Silver Lining

by Katie Sosnowchik

Thousands of starfish washed ashore. A little girl began throwing them in the water so they wouldn’t die. “Don’t bother dear,” her mother said, “it won’t 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 Domini’s 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 action—and the importance of staying the course of one’s 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 over us.

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.

“We’re 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 possible—and, in fact, maybe even highly probable—to do well by doing good


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