Socially Responsible Investing

On occasion of a special transatlantic lunch lecture on 20 June 2006, Jacob Park discussed the merits and future challenges related to socially responsible investing (SRI) focussing on past trends in the US and emerging opportunities in the developing world. The talk was followed by a lively discussion by the participating guests and Ecologic's transatlantic community.

Jacob Park is assistant professor of business and public policy at Green Mountain College in Vermont (USA) specializing in corporate social responsibility, business ethics, and community-based entrepreneurship with a special expertise/interest in Japan, China, and the Asia-Pacific region. He is also an ethical research consultant with Green Cay Asset Management, a socially responsible hedge fund/financial investment company. A former lead author in the Scenarios Working Group of the Millennium Ecosystem Assessment, he is a senior fellow of the Environmental Leadership Program and serves on the International Planning Board of the Greening of Industry Network and on the Steering Committee of the North America Green Purchasing Initiative.

In his talk [pdf, 158 KB, English] at Ecologic, Jacob Park approached the complex issue of socially responsible investment by first providing a definition of SRI as a business concept. According to this concept, the impact of investments on the environment and society are taken into account in addition to investors’ financial interests, when making decisions about investment. He then continued by detailing the most commonly used SRI screening criteria as well as highlighting the increase in socially responsible investments in OECD countries over the past years.

In a critical discussion of SRI as a driver of business sustainability, he made the point that currently the success of SRI in OECD countries depends on the buy-in of institutional investors, such as pension funds as well as a mass customization of the concept, which would make SRI more accessible to broader audiences. Addressing the role of SRI in emerging economies and the developing world, he posed the question, whether and how it could be possible to re-direct private financial capital and resources in the industrialized countries towards public sustainability benefits in those countries. To illustrated first steps in this direction, he presented two examples – the micro-loan market as well as the weather derivative initiative of the UN World Food program.

This event was kindly supported by the US Embassy in Berlin.