Connections Newsletter
Social Investment Forum News - June 2007

Program Highlights

Forum Releases New Report on SRI Options in Defined Contribution Retirement Plans

In conjunction with Mercer Investment Consulting the Forum released a report on June 5th on the presence of SRI options in defined contribution retirement plans. The report, Defined Contribution Plans and Socially Responsible Investing in the United States, indicates that more employers are now offering a socially responsible investment option and that the number is likely to grow. The survey finds that 19% of defined contribution plans already include an SRI option and that 41% of all defined contribution plan sponsors not currently offering SRI options expect to do so within the next three years.

Other findings include:

• 81% of plan administrators, 72% of consultants, and 47% of plan sponsors predict an increasing or steady demand for SRI over the next five years. The primary “drivers” for this development include a desire to align retirement plan offerings with the mission of the employer, internal staff recommendations, and employee/participant requests for SRI options.
• Health care and governmental organizations are so far the employers most inclined to add an SRI option.
• Actively managed domestic large cap equity SRI mutual funds are seeing the greatest demand from plan sponsors.
• Misperceptions about the competitive track record of SRI and fiduciary issues still exist among some plan sponsors and need to be addressed.

In addition to the report, there is an accompanying Resource Guide for Plan Sponsors: Adding a Socially Responsible Investment Option to your DC Plan. The guide includes specific steps on how to add SRI options to DC plans as well as background information on the SRI field.

Media coverage of this important report and its findings have been favorable, including placements in the Bureau of National Affairs/Pensions & Investments Daily; Corpgov.net; Credit Union Times; Docuticker; Ignites.com; Exchange Magazine, IR Web Report, Pensions & Investments, and Reuters.

Special thanks to our project partners: AltruShare Securities, Calvert, FTSE Group, Neuberger Berman, Northern Trust, and TIAA-CREF. Mercer Investment Consulting undertook the research on plan sponsors and administrators and PLANSPONSOR magazine undertook the survey of consultants.

• Read the SRI in DC Plans in the US Report (pdf)
• Read the Resource on Adding an SRI Option to your DC Plan (pdf)

Another New Forum Publication—Resource on Responsible Investing & Philanthropic Foundations

The Forum is delighted to offer a new resource, The Mission and the Marketplace: How Responsible Investing Can Strengthen the Fiduciary Oversight of Foundation Endowments and Enhance Philanthropic Missions. This new resource explains how foundations can engage in the spectrum of responsible investing strategies while meeting their fiduciary duties. It includes examples from foundations and “how to” information for endowments looking either to initiate or increase their role in mission-related investing.

This booklet offers timely information as the relationship between foundation investment practices and their philanthropic goals receives increasing scrutiny.

Special thanks to the JA and HG Woodruff, Jr. Charitable Trust, ShoreBank, and the Foundation Partnership on Corporate Responsibility for their generous support of this project.

Advocacy & Public Policy Program: Forum Urges Policymakers to Protect Shareholder Resolution Process

As we go to press, the Securities & Exchange Commission is considering a change to the shareholder resolution process that would replace the ability to file advisory shareholder resolutions with an online communication venue between investors and companies. The Forum, along with pension funds, labor groups, and other associations for institutional investors, were quick to identify the problems and setbacks such a proposal would engender.

The Forum has written to the Office of Congressman Barney Frank, Chair of the House Committee on Financial Services and to the SEC. Key points raised by the Forum include:

• For decades, the current resolution process has played a central role in formalizing communication between investors and management on social, environmental, and corporate governance issues.
• More than 95% of the shareowner resolutions filed in the last 35 years have been advisory—and have had a significant impact on business thinking
• Investors who do not file resolutions but who vote their proxies can testify as fiduciaries to the importance of the current shareholder process since the SEC has established that the proxy is an asset and needs to be treated as such.

For a sample letter to the SEC, please contact Fran Teplitz at 202-872-5326.

Letters to the SEC may be sent via email: rule-comments@sec.gov. Mention File Number 4-537 in the subject line.

The Forum will continue to keep members apprised of the issue through written updates and conference calls open to the membership.

Community Investing: 1% or More in Community Investing!

The annual Summer Roundtable of the Community Investing Campaign will take place June 25th with a focus on how faith-based investors can increase their community investments and encourage their congregations to do the same (or even to get started in community investing as the case may be!) This Roundtable is a launching pad for our outreach plans to encourage other networks commit to 1% or more in Community Investing as their own goal, for their own members. Highlights from this working group session will be shared electronically with Forum members and colleagues.

In addition to our outreach to encourage other networks, associations, and membership organizations to create their own 1% or more in Community Investing campaign, we are also re-doubling our efforts to help Forum members meet this goal. This spring we held two telephonic, educational sessions to do just that. The first session, geared especially toward advisors and planners, addressed the top 10 ways to become a community investor. The second session provided a “walk-through” of our community investing center and database at www.communityinvest.org, enabling financial professionals to review materials on issues from due diligence to model portfolios and to experience hands-on training of the database search functionality for making community investments in specific regions, for specific purposes, or with specific financial needs in mind.

Our outreach is clearly paying off—as seen in the results of our latest Community Investing Survey of Forum Members:

Over the past five years, assets dedicated to community investing by Forum members have tripled, reaching $2.4 billion at the close of 2006! And there’s more to celebrate:

• 62% of the Forum members who responded to our survey have met the 1% or more in community investing goal!
• 25% of the respondents are at 2% or more!
• 13% of the respondents are at 5% or more!

Of the respondents, 60% were money managers and Certified Financial Planners, 21% were mutual funds, and 19% were institutional investors.

While these numbers are encouraging we know we have more to do to make every Forum member a community investor. If you are not yet a community investor and need tips to get started, please contact Prianjali Mascarenhas at 202-872-5335.

Are you receiving Community Investing E-News? This year we began publishing Community Investing E-News, with campaign updates, tips for community investing, coverage of community investing instruments, and Forum member highlights. To subscribe, please contact Prianjali Mascarenhas at 202-872-5335.

International Working Group

On May 2-3, the Forum’s International Work Group (IWG) held its annual Spring Symposium in Washington, DC with great success. This year’s event, hosted at the World Bank, brought together nearly 70 participants to focus on a range of human rights issues. Presentations included:

• Corporations and Their Legal and Moral Responsibilities on Human Rights: Implications of the Ruggie Report
• Human Trafficking and Modern Slavery: Regional Perspectives
• SRI Investor Strategies to Address Exploitation of Children in Travel and Tourism
• Investment or Divestment: The Risks of Doing Business in Conflict-Prone Areas
• Human Rights in the Supply Chain: Past, Present and Future

The symposium also featured two keynote speakers: David Batstone, author of “Not for Sale: The Return of the Global Slave Trade—and How to Fight It” as well as Ian Bannon, Manager of the Conflict Prevention & Reconstruction Team, Sustainable Development Network, World Bank.

In addition, participants had the opportunity to share updates on their work and to help advise the IWG steering committee on the future program direction of the working group.

As one participant noted:

“We have too few opportunities like this to get together away from our daily distractions and focus on one or two issues deeply with our peers. The IWG meetings create a space for collaborative strategies to emerge.”

—Shelley Alpern, Trillium Asset Management Corp.

Special thanks to the Spring event sponsors: Boston Common Asset Management, Calvert, Enterprising Solutions Global Consulting, and the World Bank.

The IWG will soon begin planning its fall symposium prior to the opening of the SRI in the Rockies Conference in New Mexico. The IWG event will be held November 2-3. The event will focus on Indigenous Peoples’ rights and how SRI investors can approach the issue across several issue areas including human rights, labor rights, and the environment. Stay tuned for further details!

In addition, the IWG coordinated a special event prior to the opening of the Social Investment Organization conference in Montreal on May 27th. The event brought together Canadian and US SRI practitioners to hear Dr. Stephen Davis, author of The New Capita lists speaking on the rise of citizen investors and developments in shareholder advocacy as well as a presentation on Oil Sands development in western Canada with representatives from business, the SRI industry, and non-governmental organizations. Building on the success of this event, we look forward to ongoing and increased collaboration with our Canadian colleagues this year and beyond!

Social Investment Research Analyst Network (SIRAN)

The Forum’s Social Investment Research Analyst Network (SIRAN) conducted a workshop in Washington, DC on May 3-4 in conjunction with the International Working Group symposium (above). The event attracted more than 60 social investment research analysts who delved into the following issues:

• Activating Sustainability Disclosure
• Fair Lending
• Responsible Property Investing
• Environmental Accounting and Implications of Global Warming

The workshop combined expert presentations with opportunity for discussion among the participants to deepen analysts’ understanding and engagement in these issues. SIRAN also reviewed its new committee structure and invited participants to get involved in SIRAN’s programming, including the Education and Brownbag Committee, Company Meeting Committee, Outreach Committee, and the Conference Committee. Interested analysts should contact Jeff MacDonagh at 212-217-1073 or Noel Friedman at 617-426-5270.

SIRAN’s educational brown bag series has been as active as ever, including telephonic sessions from March through May on corporate approaches to water sustainability, credit card debt and industry practices, global warming, executive compensation, and animal welfare.

On April 25, 2007 at the Ceres Conference, SIRAN and KLD Research & Analytics, Inc. announced the finding of their annual report on the environmental and social performance reporting of US companies in the S&P 100 Index. Now in its third year, the study shows that nearly half (49) of these companies are now disclosing information on their ESG (environmental, social, and governance) performance. This marks a 14% increase over last year’s study. In addition, more than a third (38) of these companies are using the Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI), a 12% increase over last year’s study. The latter reflects the outreach effort by SIRAN participants to encourage GRI-based reporting. For more information visit: www.siran.org

Visit SIRAN.org

Green Mountain Summit!

The Green Mountain Summit will be held this year July 19-20 at the Hyatt Regency Newport in Newport, Rhode Island. Advisors and planners who are members of the Social Investment Forum will receive up to a 25% discount on the event

Planned sessions include the following:

• Trends in asset allocation
• Fiduciary responsibility and litigation
• Indexing and active management—the role of the fiduciary in meeting return and risk objectives
• “Terror-free” investing
• Environmental, Social and Governance Analysis
• Responsible International Investing
• Using EFTs in portfolios of responsible investors

Advisors and Planners who are SIF Members register at discounted rate

SRI in the Rockies Conference—Great Speaker Line-up in Store!

The SRI in the Rockies Conference, November 3-6, 2007, will take place at the Hyatt Regency Tamaya Resort & Spa on the Santa Ana Pueblo in New Mexico, not far from Albuquerque. A terrific agenda is already in store—and more program details will be available soon. Confirmed plenary speakers include:

Phil Angelides: President and owner of Riverview Capital Investments, has had a distinguished career in both the public and private sectors. He served from 1999-2007 as California State Treasurer and was the Democratic nominee for governor in 2006. Prior to his tenure in public office, Mr. Angelides built his own investment and management business which earned a reputation for economic success and innovation. Treasurer Angelides launched ground-breaking initiatives—Smart Investments and The Double Bottom Line—that directed $26 billion to promote smart growth and to create jobs, housing and opportunities in inner cities, catalyzing a wave of re-investment by public pension funds and private investors in urban centers across the country. Through his Green Wave initiative, he put the weight of the state‘s pension funds behind investment in environmental technology and the fight against global warming—seeding the “green-tech” investment revolution.

Joe A. Garcia: Chairman of the All Indian Pueblo Council (AIPC), formed in 1598, which serves the 19 Pueblos of New Mexico. He also serves as President of the National Congress of American Indians (NCAI), the largest national Indian organization, representing over 250 member Tribal Nations from throughout the United States. Born and raised in Ohkay Owingeh (San Juan Pueblo), Mr. Garcia continues to serve his community in traditional, educational, tribal government, and economic development efforts. He recently completed his third term as Governor of the San Juan Pueblo in northern New Mexico. On January 1, 2007, Mr. Garcia swore-in Governor Bill Richardson as the Governor of New Mexico.

Winston H. Hickox: Chair of the California Market Advisory Committee which supports the implementation of the state‘s first-in-the-nation comprehensive greenhouse gas reduction program. As a former Secretary of the California Environmental Protection Agency, Mr. Hickox was instrumental in the enactment of legislation requiring new greenhouse gas emission standards for cars. He also established the Environmental Protection Indicators for California, and led the implementation of Environmental Justice legislation in California. Since July of 2004, Mr. Hickox has been employed by CalPERS, the California Public Employees‘ Retirement System, as a Senior Portfolio Manager. He has assisted with the design and implementation of a series of Environmental Investment Initiatives, including investments in clean technology, and other investment initiatives focused on the impacts of climate change.

Luther M. Ragin, Jr.: Vice President for Investments at The F.B. Heron Foundation. Prior to joining the $300 million Heron Foundation in 1999, Mr. Ragin was the Chief Financial Officer of the National Community Capital Association, a trade association of community development financial institutions that provide access to capital in low-income communities. Other significant experience includes eight years as Chief Financial Officer of Earl G. Graves, Ltd., and seven years with Chase Manhattan Bank, including three years as Vice President of Syndications/Assets Sales for the North American Corporate Finance Sector.

Richard L. Sandor, PhD: Chairman and CEO of the Chicago Climate Exchange, the world‘s first multi-national and multi-sector marketplace for reducing and trading greenhouse gas emissions. In 2002, he was chosen by Time magazine as one of its "Heroes for the Planet" for his work in creating the Chicago Climate Exchange. In 2005, he was named by Treasury and Risk Management magazine as one of the “100 Most Influential People in Finance.” Widely recognized as a founder of the interest rate derivatives markets now traded worldwide, Dr. Sandor has held a variety of senior executive positions in the financial services industry at Drexel Burnham Lambert, Kidder Peabody, and Banque Indosuez.

Former U.S. Congresswoman, Claudine Schneider, is a citizen activist, policy maker, businesswoman, and consultant. In 1980, she was the first woman ever elected to any major political office in the state of Rhode Island. Her decade in the U.S. House of Representatives was marked by successful passage of numerous bills that addressed environmental issues, economic equity for women, and international affairs. Ms. Schneider authored the first and only revenue neutral Global Warming Prevention Act in 1988. Half of the bill passed, including the nation's first Appliance Efficiency Standards.

The conference will also include a wide range of break-out sessions on cutting-edge social, environmental, and fiduciary issues now facing investment professionals.

Native American Leaders for SRI

Prior to the opening of SRI in the Rockies, on Friday, November 2, 2007 there will be a special pre-conference event for Native American leaders interested in learning about SRI. The event will bring together chief financial officers, treasurers, and other tribal leaders to:

• Learn about different strategies and concepts within SRI;
• Discuss with SRI professionals how best to address Indigenous Peoples‘ issues through SRI.

The Forum's working groups on Community Investing and International SRI will also participate, addressing the roles and needs of Indigenous Peoples' in terms of community economic development and international issues.

Special thanks to our event sponsors: Boston Common Asset Management, Calvert, Fred Alger Asset Management, Oneida Tribe of Indians of Wisconsin Trust Department, Pax World Funds, Trillium Asset Management Corp., Walden Asset Management.

For more information please contact: Sylvia Panek at the Social Investment Forum at 202-872-5346 or Susan White at the Oneida Trust Department at 920-490-3935.

Upcoming: Co-op America Green Festivals in Washington, DC; San Francisco; and now Seattle!

Co-op America and Global Exchange, national leaders for a green economy, are now organizing Green Festivals in the following cities:

Washington, DC: October 6-7
San Francisco: November 9-11
Seattle: April 12-13, 2008 (new!)

For information on having a booth on socially and environmentally responsible investing please call: 877-727-2179.

Chicago Green Festival in April a Success!

Co-op America‘s first Midwest Green Festival™ in Chicago, held over Earth day weekend, broke records and exceeded all expectations. With 31,133 people attending, 200 workshops and lectures—including socially responsible investing sessions—it was the largest launch of a new Green Festival yet.

Setting an example for other large-scale events, Green Festival Chicago recovered more than 92% of all the waste generated by attendees and 350 exhibitors. All the waste was recycled or composted with less than 1,700 pounds going to the local landfill. Over 1,200 volunteers were on hand as greeters and greeners to make the experience an amazing sustainable event.

Media coverage was also record-breaking: over 44 media outlets covered the event with over 22 television spots throughout the weekend. Press included: NBC, Telemundo, The Weather Channel, iVillage, NBC Weekend Today Show, CBS, ABC, FOX, Chicago Tribune, Chicago Sun-Times, Chicago Reader, WBEZ, WVON, WLBK and American Urban Radio. The Washington, DC NBC station is already running spots for the upcoming Green Festival on October 6-7.

Mayor Richard M. Daley kicked off the city-sponsored Chicago Green Festival with welcome remarks on Saturday. He was later joined by Commission for Environment Sadhu Johnston and their respective families as they toured the Green Festival with Denise Hamler, Co-op America Business Network (CABN) and Green Festival Director. “The credit for such a successful turnout at Chicago‘s first Green Festival really belongs to the residents of the City and surrounding areas,” said Chicago Environment Commissioner Sadhu Johnston. “The City of Chicago will continue to do its part but the residents showed that they are more than willing to step up to the plate to help us protect and preserve our environment.”

More information at GreenFestivals.org