People generally like to measure a business’s worthiness based on its bottom line — not its values.
But over the past couple of decades, socially responsible investing (SRI) has grown into an industry worth trillions. Cliff Feigenbaum, who founded GreenMoney Journal 25 years ago, joined us to talk about the increase in people who are matching their values with their portfolios, and what happens when a company has the right track record on certain issues, but not others.
Below is an edited transcript.
David Brancaccio: I remember back in the early days you’d see articles where we would do coverage about impact investing — socially responsible investing it was called at the time — and you’d get the Wall Street hot shot saying, “Oh, that just leaves money on the table. Oh, you can’t succeed if you start worrying about what the companies are actually doing.” You showed that that view is really quite wrong.
Cliff Feigenbaum: Over the 25 years I think this industry, the SRI industry, has matured. There’s now $9 trillion involved in SRI and $23 trillion globally. And, in fact, Bloomberg reported that $6 billion moved towards SRI last year and $4 billion already this year.
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Brancaccio: Now GreenMoney, your journal, doesn’t decide what your values should be. It’s not just progressive values. If a person were more conservative, for instance, you can come up with a portfolio that is a little bit more palatable to your personal values.
Feigenbaum: Absolutely. You know, we started GreenMoney because it’s about aligning your money with your values. Whatever your values are — from the way you shop to the way you invest, even local banking.
Brancaccio: Now what do you think, Cliff. You’ve thought a lot about this. I mean, you try to make your portfolio align with what you believe — it’s not always easy. You might reward a company that has a better environmental record, but oh, it doesn’t do quite as well as some other peer companies when it comes to promoting women and minorities. How do you balance that?
Feigenbaum: We see the shareholder activism part is where you improve companies. In fact, this year, there were over 70 shareholder proposals on climate change issues. And in fact, Exxon’s own shareholders, 60 percent of them, asked for the company to start reporting on climate change risks. A company doesn’t start out perfectly. There are many times that it can be improved. And that’s what SRI helps companies move towards more — innovation and sustainability.