Socially Screened Portfolios Post Steep Increase

November 28, 2001 ( - Assets in socially screened investment portfolios under professional management grew by 36% between 1999 and 2001, climbing from $1.49 trillion to $2.03 trillion in the two-year period, according to a new report.

According to the Social Investment Forum’s 2001 Report on Responsible Investing Trends in the US, that growth rate is over one and a half times the 22% increase reported for all investment assets under management in the US over the same period.

Expanding the Definition

The survey also revealed that over $2.3 trillion resides in professionally managed portfolios utilizing one or more of the three strategies that together define socially responsible investing in the US:

· screening,
· shareholder advocacy, and/or
· community investing

By this broader measurement, socially and environmentally responsible investing in the US grew 8% from $2.16 trillion in 1999 to $2.34 trillion in 2001.

Slice of the Pie

According to survey data, the $2.34 trillion managed by major investing institutions, including pension funds, foundations and religious organizations, accounts for nearly 12% of the total $19.9 trillion in investment assets under management in the US, reported by Nelson’s Directory of Investment Managers.

Assets in separate accounts managed for institutional clients and individual investors grew by nearly 40% from 1999 to 2001. These socially screened private portfolios rose to $1.87 trillion in 2001 from $1.343 billion in 1999.

The report notes that there are now 230 mutual funds in the US that incorporate social screening into the investment process, compared to 168 in 1999. The market downturn has left assets in social funds flat at $153 billion in 2001 and $154 billion in 1999.

Smoke Screen

According to the report, tobacco is the most widely used screen in screened portfolios. Other broadly utilized screens include:

· weapons,
· human rights
· employment/equality,
· alcohol,
· the environment, and
· gambling.