Shareholders show increased resolve to support proxy ballots

By James Hyatt

Total assets of professionally managed socially responsible funds rose more than 18 percent between 2005 and 2007, the Social Investment Forum reported.

The study identified $2.71 trillion in total assets invested in one or more core strategies—screening, shareholder advocacy and community investing.

Socially and environmentally screened funds rose 13 percent over the two years, and the number of such funds rose to 260 from 201. The study, for the first time, identified eight exchange traded funds (ETF) with $2.25 billion in total net assets. While ETFs accounted for only one percent of the total assets of screened funds in the study, “they promise to be a dynamic catalyst for SRI growth in the future,” the report said.

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. The total number of resolutions increased from 360 in 2005 to 367 in 2006.

Institutional investors that filed or co-filed resolutions on social or environmental issues controlled $739 billion in assets in 2007, a more than 5 percent rise over the $703 billion in assets counted in 2005.

The forum attributed the growth in assets to a number of reasons:

• Money managers increasingly incorporating social and environmental factors into their investing practices, due to demand from customers.
• The products and fund styles, especially EFTs and alternative investment funds.
• Growing concern about climate change and its risk.
• Increasing numbers of investors incorporating concern for the crisis in the Sudan in investment decisions.
• Developments making it easier for investors to participate in community investing.