Secular Forces Driving Change

As an organization, we believe that there are secular global trends that are and will continue to drive demand for capital investments that are focused on social, civic, ethical, and environmental initiatives and that over the long term, the enterprises that embrace these trends will tend to have superior economic, and thus, share price performance.   Some of these transformations that are driving this revolution toward social responsibility include:

·         Accelerating demands on a limited natural resource base driven by industrialization and urbanization of many of the fastest growing regions of the world, such as Brazil, Russia, India, and China. 

·         The rapid growth of communication tools such as the internet and social networking are accelerating the dissemination of information to employees, consumers, and other stakeholders.  Corporate misbehavior is much less likely to be concealed in this era.

·         Governments around the world are embracing new approaches of environmental stewardship, relying less on legal command and control tactics, and increasingly aligning economic incentives to encourage good behaviors (i.e. cap and trade)

We do most of our individual stock environmental screening in-house, as a part of our due diligence process, but we also have relationships and low-cost access to mutual fund families that include social and environmental screening as part of their investment processes.

Some of the funds families we believe have relationships with include:

Pax World

Appleseed

Calvert Investments

Neuberger Berman

Domini Social

Green Century FUnds

Catholic Aquinas Values Funds

MMA Praxis Funds

Sustainability can drive Profitability!

While critics argue that socially responsible investing is by nature a handicapped investment strategy because it reduces the universe of investable opportunities, and therefore reduces chances of success, we believe this view is flawed.  Evidence shows that investors with longer time horizons that consider these factors into their screening models generate similar and potentially higher returns than and that socially responsible screening can generate equal if not greater financial returns.   Furthermore, we believe that companies that incorporate “sustainability factors” into their decision making tend to be:

·         Companies that value transparency to their customers, employees, business partners, stakeholders, and other constituents

·         Tend to be more agile and adaptable to changing regulatory or consumer demands

·         Less likely to lose customers due to brand loyalty and reputational capital

·         Have greater control over cost structures and are generally run more efficiently

·         Tend to be more forward looking and strategic

·         Are often managed by more competent, ethical, and visionary leaders

When evaluating social responsibility we consider not only obstacles of sector bias, but also each individuals unique views and concerns about social responsibility. Some of the various screening metrics we include in our determination of an investments social responsibility ranking include: