Socially Responsible Investing (SRI)

Here is my latest prezi about Socially Responsible Investment.
Its from a presentation i gave in my class yesterday.

enjoy!

Socially Responsible Investment (SRI) on Prezi

My speaking notes:

Intro:

Have you heard about SRI?

Do you think SRI is important?

Did you, in the investment game, screen your stocks with SRI values?

Why?

Why not?

There is a wide believe out there, that SRI brings back lower returns, is more risky or less attractive for investors. I will try to prove the opposite.

Video

Def:

Socially responsible investing (SRI), also known as sustainable, socially conscious, green or ethical investing, is any investment strategy which seeks to consider both financial return and social good.

What are your personal values?

What do you believe in?

Do you believe in peace, abundance, community?

Or in war, scarcity and dictatorship?

What would you rather want your money to support?

Weapons solar panels

mass murder community

oil spills - nature

Creation myth:

Quakers:

Who knows these guys?

Quakers?

Quakers “invented” sRi in the 1758 cause a doctrine told them they where “prohibited members from participating in the slave trade–buying or selling humans.“

Modern:

In the 1960’s, due to the political climate, increasingly sought to address equality for women, civil rights, and labor issues.

Economic development projects started or managed by Dr. Martin Luther King, like the Montgomery Bus Boycott and the Operation Breadbasket Project] in Chicago, established the beginning model for socially responsible investing efforts

1950s and 1960s, trade unions started investing pension funds

SRI had an important role in causing ending the apartheid government in South Africa

Since the late 1990s, SRI has become increasingly defined as a means to promote environmentally sustainable development

GROWTH

Socially responsible investing is a booming market in both the US and Europe. Assets in socially screened portfolios climbed to $3.07 trillion at the start of 2010, a 34% increase since 2005

From 2007-2010 alone, SRI assets increased more than 13%, while professionally-managed assets overall increased less than 1%

So what does SRI do?

What are the approaches investors typically utilize in SRI?

Screening

evaluating investment portfolios or mutual funds based on social, environmental and good corporate governance criteria.

Screening may involve including strong corporate social responsibility (CSR) performers, avoiding poor performers, or otherwise incorporating CSR factors into the process of investment analysis and management. Generally, sutainable and responsible investors seek to own profitable companies that make positive contributions to society. "Buy" lists may include enterprises with, for example, good employer-employee relations, strong environmental practices, products that are safe and useful, and operations that respect human rights around the world.

Shareholder advocacy

sustainable and responsible investors who take an active role as the owners of corporate America.

These efforts include talking (or "dialoguing") with companies on issues of social, environmental or governance concerns. Shareholder advocacy also frequently involves filing, and co-filing shareholder resolutions on such topics as corporate governance, climate change, political contributions, gender/racial discrimination, pollution, problem labor practices and a host of other issues. Shareholder resolutions are then presented for a vote to all owners of a corporation.

Community Investing 

directs capital from investors and lenders to communities that are underserved by traditional financial services institutions.

Community investing provides access to credit, equity, capital, and basic banking products that these communities would otherwise lack. In the US and around the world, community investing makes it possible for local organizations to provide financial services to low-income individuals and to supply capital for small businesses and vital community services, such as affordable housing, child care, and healthcare

How many assets are involved in SRI?

US SIF's 2010 Report on Socially Responsible Investing Trends identified $3.07 trillion in total assets

How many SRI mutual funds are there?

 2010, there were 250 socially screened mutual fund products in the US

What is the fastest growing area of SRI?

Community investing

 Over the past three years, community investing has grown over 60-percent, from $25.0 billion to $41.7 billion in assets.

Performance and SRI Investment

FTSE KLD 400 with returns of 9.51

 8.66 percent for the S&P 500

domini 400:

1. Approximately 250 companies in the S&P 500
2. 100 companies not in the S&P 500, but providing sector diversification and exceeding pre-determined market cap limitations
3. 50 companies that have shown excellence in their social and environmental dealings

Coca Cola seeks "corporate green washer"

Since I'll be graduating soon, I've been browsing through jobs in the area of business and sustainability.
One of my favorites so far was Coca Cola's Job description for a "Sustainability and Stakeholder Relations Manager"

Sounds interesting - right?
Seems to me though, that this is a job only looking to "green wash" Coca Colas initiatives.

from: http://development.thinkaboutit.eu/think3/
post/google_search_of_the_day_coca_cola_greenwashing

Here are some Highlights found in the Job description:

The SSR Communications Manager is responsible for ensuring that the planning, development and delivery of the CCR Sustainability story is told to key media, associates and stakeholders across the country. (so far so good)

* Community and Special Interest Groups: Knowledge of community and special interest groups (e.g., objectives, leadership, methods) that have the potential to impact the Company's business or operating environment. Includes ability to influence these groups on behalf of the Company.
(influencing communities on behalf of the company - well... that sounds genuine...)

* Government Relations: Knowledge of how government is structured and understanding of how public policy decisions are made and implemented. Includes ability to communicate effectively with politicians.
(communicate effectively with politicians... well... lobbying would be the better word)

* Crisis Management: Knowledge of procedures used and ability to rapidly mobilize and manage internal and external resources to deal with situations that have the potential for severe negative impact on the Company's reputation or business.

* Work with Product Supply, Region Teams and AHL PAC colleagues to provide early-warning system and internal/external communications strategy and messages for potential negative issues.

The hole description can be found here:

http://www.amightyriver.com/job-search/sustainability-and-stakeholder-relations-manager.5533147.html?from=SimplyHired&utm_source=SimplyHired&utm_medium=jobboard&utm_campaign=SimplyHired

interested?

good luck, and let me know how it turns out!!

Certified B Corps and Benefit Corporations

B Corp Certification

B corp on Prezi

About B-Corporations

What is a B Corp?

According to Inc. magazine, the B Corp movement started in 2007 and was founded by 81 companies that all looked for alternative ways to make business differently then the traditional for-profit model (Brown, 2011)#. [you may either footnote or use the in-line citation system; you should not use both at the same time.]
The Vision of the Certification is to find and certify corporations that use the power of business to solve social and environmental problems
B-Corps are privately certified through the non-profit B-Labs, which certifies B Corporations according to the website if they meet requirements in three areas:

1. Meet comprehensive and transparent social and environmental performance standards
2. Meet higher legal standards
3. Build business constituency for public policies that support sustainable business

As of now, there are about 500 certified B Corporations in 60 different areas of business. The impact of these companies can be seen through their publicly available B Impact Report with data about the social and environmental practices.

Who sets the standard?

B-Labs aims  to redefine the purpose of a business by creating business communities and market infrastructure where people can distinguish between businesses that are “good” and businesses that simply have good marketing (greenwashing?).

They emphasize empowering entrepreneurs and the stakeholders of their businesses so they can stand for something positive.

According to their website, there are three things they do for companies to systematically bring change and create a new business sector:

1. Build a community of Certified B Corporations to distinguish between good companies and good marketing

2. Use their GIIRS Ratings & Analytics to accelerate impact investing asset class growth

3. Promote legislation that creates a structure for higher business standards

(Source: http://www.bcorporation.net/The-Non-Profit-behind-B-Corps) 

Who is involved in developing or modifying the standard, and by what procedure is the standard developed or modified?

The certification is done partially by the business itself and partially by B-Labs staff members. They continuously improve their assessments with feedback and lessons learned through practice. (source:http://blog.southern-energy.com/index.php/sem-triple-bottom-line/b-corp-assessment-take-2/)

A three step process is needed for a business to get their B-Corp certification and is mentioned on the B-Labs website:

• The business needs to get a minimum of 80 points out of 200 on the B Impact assessment. This assessment will be reviewed by a B-Labs staff member
• The business must adopt the legal framework provided by B-Labs to align its values with other B Corporations.
• The business must sign a term sheet and a declaration of interdependence to make it official  

(source:http://www.bcorporation.net/Certification-Overview)

After receiving the certification, B-Labs will do an on-site evaluation on 20% of the certified B-Corps over a two year term.

Who are the evaluators and who accredits them?

Most of the evaluating is done in-house by B-Labs themselves, so the evaluators are B-Labs staff and [are accredited by other B-Labs accreditors] - [no, just say that they are trained by B-Labs. There is no accreditation process in the B-Corp system].

Training of Audit Staff and Consultants

The B Corp website lists a plethora of of consultants who are not trained by B-Labs for consulting but are B corp certified themselves.

[“certified” is the wrong word, because that applies to a corporation. In the text, I said “credentialed” to refer to what a person gets when they are trained to act as an auditor or consultant] Can you say more about the extent of training given to people in order to get a credential from B-Labs? Is there a name to that credential?

(source: http://www.bcorporation.net/index.cfm/fuseaction/serviceArea.detail?id=739f6273-bedf-43da-ad71-990aa02407df) Businesses can also ask for help from B-Labs at any point in the certification process.

Legislative Component

B-Lab, the company behind the B Corps, also works parallel with many states within the United States to lobby for a legal change, to create a legal “Benefit Corporation”.
Even though B Corps [? do you mean B-Lab rather than B Corps?] and Benefit Corporations have very much in common, they are essentially independent from each other. Certified B Corps are certified independently by the non profit B-Lab. (source:http://www.bcorporation.net/publicpolicy)
Benefit corporations are not certified but have legal requirements of corporate purpose, accountability, and transparency (B Lab)#. [you already said this]
Benefit Corporations legally meet higher standards of corporate purpose, accountability and transparency. According to the website, there are 3 main factors: [this too is repetitive]

1. Purpose: have a corporate purpose to create a material positive impact on society and the environment;
2. Accountability: expand fiduciary duty to require consideration of the interests of workers, community and the environment; and
3. Transparency: publicly report annually on overall social and environmental performance against a comprehensive, credible, independent, and transparent third party standard.

(source: http://www.bcorporation.net/publicpolicy )

Benefit Corporations are legally established in 7 states (California, Hawaii, New York, Virginia, Maryland, Vermont, and New Jersey) and pending in North Carolina, Pennsylvania, Michigan and Washington. (source: http://www.benefitcorp.net/state-by-state-legislative-status)
B Lab seems to be the driving force behind the legislative changes, and seems to be lobbying in all states in the USA to get Benefit Corporations legislation.

According to the website, the benefits of becoming a benefit corporations are:

• Provide clarity to directors and officers that their fiduciary duty includes creating a material positive impact on society and the environment, even in liquidity/sale scenarios;
• Offer legal protection to directors and officers to consider the non-financial interests of their workforce, community, and the environment when making decisions, even in liquidity/sale scenarios;
• Help maintain mission over time by 1) expanding shareholder rights to enforce this expanded definition of fiduciary duty and standard of consideration; and 2) requiring a 2/3 super-majority vote of shareholders to remove these higher standards; and 3) providing the opportunity to name and enforce pursuit of one or more specific public benefit purposes;
• Create a marketing opportunity to differentiate the business as a new class of corporation required by law to benefit society as well as shareholders.

[this is a very interesting part of your report. Can you say more about this. What does the state legislation say? Does it say that a company must be certified by B-Labs to get this protection, or does it say that a company must meet certain conditions (if so, what are they?) to qualify for the legal protection?