Socially responsible investment policies improve corporate behavior but dont necessarily improve investment return or limit investment risk, according to a survey of institutional investors by fund of funds EACM Advisors.
Respondents didnt think (SRI) would hurt return, said Mike Dunn, spokesman.
The survey results reflect the tension between the need to operate in an SRI-compliant way and their fiduciary consideration for return, said Bill Crerend, CEO of EACM Advisors. It is still a challenge to marry (SRI policies) with what youd do in mainstream investment management process.
Respondents reported 9-to-1 that their SRI policies improve corporate behavior. And by more than 2-to-1, respondents indicated they use avoidance screening: Stocks of tobacco companies, followed by pornography and adult entertainment, were singled out by respondents as the top two categories to avoid.
Organizations using positive screening indicated their top two types of investments were companies with good human rights records and those with good environmental policies.
The survey, conducted in October, analyzed the results of more than 200 respondents from foundations, endowments and non-tax-exempt organizations.