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Socially Responsible Investment surges in U.S.

SRI now growing at a much faster pace than the broader universe of all investment assets under professional management

Washington (6 March 2008) – Spurred by such factors as rising institutional investor interest, growing demand for climate-related renewable energy alternatives, concerns about the Sudan humanitarian crisis, and the emergence of new products, socially responsible investing (SRI) in the United States is now growing at a much faster pace than the broader universe of all investment assets under professional management.

According to the new edition of the Report on Socially Responsible Investing Trends in the United States published by the nonprofit Social Investment Forum (SIF), from 2005 to 2007, SRI assets increased more than 18 percent while all investment assets under management edged up by less than 3 percent.

The Trends report identifies $2.71 trillion in total assets under management using one or more of the three core SRI strategies -- screening, shareholder advocacy, and community investing. In the past two years, social investing has enjoyed healthy growth from the $2.29 trillion documented in the 2005 Trends report.

Today, nearly one out of every nine dollars under professional management in the United States is involved in socially responsible investing -- 11 percent of the $25.1 trillion in total assets under management tracked in Nelson Information’s Directory of Investment Managers.

Highlights of the new Social Investment Forum Trends report include the following:

  • Screened funds – Assets in all types of socially and environmentally screened funds – including mutual funds and exchange-traded funds (ETFs) – rose to $201.8 billion in 260 funds in 2007, a 13 percent increase over the $179.0 billion in the 201 tracked in 2005. Eight socially and environmentally screened exchange-traded funds (ETFs) with $2.25 billion in total net assets were available through the end of 2006 – the first time SRI-focused ETFs have been a factor in a Social Investment Forum Trends report.
  • Institutional investors – At more than $1.9 trillion in assets, socially screened separate accounts managed for institutional investors and high net worth individual clients constituted the bulk of SRI assets tracked in 2007, up 28 percent from $1.5 trillion in 2005. Institutional investors have also used the stock they hold to increasingly participate in shareholder resolutions.
  • Shareholder resolutions – The average level of shareholder support for resolutions on social and environmental issues increased 57 percent from 9.8 percent in 2005 to 15.4 percent in 2007, a record high.
  • Community investing – Assets in community investing institutions rose nearly 32 percent from $19.6 billion in 2005 to $25.8 billion in 2007.

Social Investment Forum Board Chair Cheryl Smith, executive vice president and senior portfolio manager at Trillium Asset Management Corporation, said: “Thanks to growing institutional investor demand and a wide range of issues that are driving stronger retail investor interest, socially responsible investing is thriving today as never before.”

For the full text of the executive summary of the 2007 Trends report, go to www.socialinvest.org/resources/research