Thanks for a well thought through response! I agree that the vast majority of “SRI” funds aren’t engaging with their portfolio companies in meaningful ways. In fact, since I joined the industry in 2013, there has been a boom in providers claiming to be “sustainable”. The hardest part of what I do these days is sifting through the pitches to find investment firms that are taking this seriously and not just “greenwashing” as we call it.
That said, the trend is real and important, and there’s another part of it that’s worth considering: while there are indeed a limited number of engagements in any given year, the funds that want to be seen as sustainable often follow the leaders in the space into engagements, so while a small number of firms lead engagements, the ‘hangers on’ magnify the assets behind these proposals. I personally believe that EA minded individuals should look for asymmetric ways to spend their time, where by working on an issue, you can attract more capital/investors/time/energy/effort/utility. I also believe that the trends we’re seeing in the SRI industry are the first wave, as firms develop their capabilities and learn what their investors want. as time goes on, I believe we’ll see more funds voting their proxies in response to advocacy campaigns (although—this is my personal belief and I could very well be wrong)
I’d direct you to the post I made on my (very new—please be kind) blog on the recent USSIF trends report, which has some additional graphics about WHY asset managers are acting this way (self-reported data) that supports this belief.
Kit,
Thanks for a well thought through response! I agree that the vast majority of “SRI” funds aren’t engaging with their portfolio companies in meaningful ways. In fact, since I joined the industry in 2013, there has been a boom in providers claiming to be “sustainable”. The hardest part of what I do these days is sifting through the pitches to find investment firms that are taking this seriously and not just “greenwashing” as we call it.
That said, the trend is real and important, and there’s another part of it that’s worth considering: while there are indeed a limited number of engagements in any given year, the funds that want to be seen as sustainable often follow the leaders in the space into engagements, so while a small number of firms lead engagements, the ‘hangers on’ magnify the assets behind these proposals. I personally believe that EA minded individuals should look for asymmetric ways to spend their time, where by working on an issue, you can attract more capital/investors/time/energy/effort/utility. I also believe that the trends we’re seeing in the SRI industry are the first wave, as firms develop their capabilities and learn what their investors want. as time goes on, I believe we’ll see more funds voting their proxies in response to advocacy campaigns (although—this is my personal belief and I could very well be wrong)
I’d direct you to the post I made on my (very new—please be kind) blog on the recent USSIF trends report, which has some additional graphics about WHY asset managers are acting this way (self-reported data) that supports this belief.
https://www.commoninterestsfinancial.com/2018-trends-in-responsible-investing/