Dear EarthTalk: I've heard of the slow food movement, but what is “slow money” all about?
-- Phil Nimkoff, New York, NY

“Slow Money” is the name for a movement started by socially conscious investing pioneer and author, Woody Tasch, who essentially borrowed the conceptual framework of “Slow Food”—whereby participants eschew convenience-oriented “fast” foods, instead filling up their plates with traditional, unprocessed and, ideally, locally produced foods—and applied it to personal finance and investing. As such, Slow Money is dedicated to connecting investors to their local economies by marshaling financial resources to invest in small food enterprises and local food systems.

Woody Tasch

Tasch’s vision for Slow Money, now not just a concept but also a non-profit organization, seeks nothing less than a complete overhaul of the way we think about and spend our money, channeling much more of it into producing healthy local food, strengthening local communities instead of multinational corporations, and restoring our flagging economy in the process. Instead of venture capital bankrolling far flung high tech start-ups, Tasch hopes to see “nurture capital” funding local merchants and producers who, in turn, plug half of their profits back into their communities, ensuring one small local virtuous circle that values soil fertility, carrying capacity, a sense of place, care of the commons, diversity, nonviolence, and cultural, ecological and economic health as much as financial return. Tasch hopes to get there by persuading a million Americans to invest at least one percent of their assets in local food systems by 2020.

Tasch started Slow Money in November 2008 after the publication of his book, Inquiries into the Nature of Slow Money: Investing as if Food, Farms and Fertility Mattered. Hitting the road to promote the book and the nascent movement in 2009, he was able to attract 450 intrigued investors, farmers and other entrepreneurs to Santa Fe, New Mexico to trade ideas at a three-day gathering. “We just wanted to see who would show up, but four of the small food enterprises that presented raised an aggregate of $260,000,” says Tasch. Tasch then organized another event for some 600 attendees the following June in Shelburne, Vermont. Investors there poured $4.2 million into 12 more producers, and that’s when Tasch knew he was really on to something. More than 1,000 people converged in San Francisco for the third event in October 2011, and Tasch expects untold amounts of “slow capital” to be changing hands for the better as a result.

Whether or not you have money to invest in Slow Money’s virtuous circles, you can show your support by visiting the group’s website and electronically signing the organization’s Principles, a list of six core beliefs shared by the Slow Money community. Or if you have just $25, you could park it with the organization’s Soil Trust, which will seed small food enterprises that promote soil fertility in locales from coast to coast. Tasch sees the Soil Trust as key to opening up the Slow Money concept to all of us and achieving the group’s goal of getting a million Americans involved in the movement over the next decade.

Another key to achieving Tasch’s goal is growth of leadership at the local level. To that end, a dozen autonomous local chapters have sprung up nationwide, with more sure to come as word gets out. The local groups have already gifted or lent hundreds of thousands of dollars to entities working to improve their own community “foodsheds.” Now we all have a way to truly put our money where our mouths are.

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A new study by analysts at J.P. Morgan concludes that “impact investing” – which is intended to generate social good as well as financial return – could represent a highly-profitable trillion dollar market over the next decade.

Women at water pump in Mozambique

“The market opportunity for investment is vast,” the study (PDF) says, “As this movement gathers steam, we recognize the potential for impact investments to attract a larger portion of mainstream private capital and anticipate that more investors will seek to generate positive social and/or environmental impact when making investment decisions. In fact, we believe that impact investing will reveal itself to be one of the most powerful changes within the asset management industry in the years to come.”

Impact investing, according to the study, can target and benefit different populations: the so-called “base of the pyramid” (BoP), which has been defined by the World Resources Institute as people in emerging markets earning less than $3,000 a year; a broader “base of the pyramid” which includes low-income populations in developed markets; and the broadest group, “which can include those impacted by income-independent factors such as climate change.”

Applying its methodology only to the first of those groups - the BoP population in emerging markets – the study identifies five business sectors - housing, rural water delivery, maternal health, primary education and financial services – with potential over the next 10 years for total invested capital of $400 billion to $1 trillion and profit of $183 billion to $667 billion.

The BoP market opportunity exists, the study says, because ““markets at the base of the economic pyramid are typically under-served by traditional business, which may exclude this population from being considered part of its potential customer base.”

Impact investing is attracting a wide variety of investors “including development finance institutions, foundations, private wealth managers, commercial banks, pension fund managers, boutique investment funds, companies and community development finance institutions,” according to the study.

While these investors have varied expectations regarding financial returns, the study says, increasingly “entrants to the impact investment market believe they need not sacrifice financial return in exchange for social impact. Indeed, many have a regulated, fiduciary duty to generate risk adjusted returns that compete with traditional investments.”

The report notes that J.P. Morgan is a co-founder – along with the Rockefeller Foundation and the U.S. Agency for International Development – of the Global Impact Investing Network, which aims “to accelerate the development of an effective impact investing industry.”

Among other signs of growth, the study says, “large-scale financial institutions such as J.P. Morgan, Citigroup, Prudential and Africa’s Standard Bank are positioning themselves to grow impact investing businesses beyond their minimal regulatory obligations.”

Photo: World Bank

A new study by researchers at Harvard Business School and London Business School concludes that companies which have voluntarily embraced a sustainable business culture over many years “significantly outperform their counterparts over the long-term, both in terms of stock market and accounting performance.”

The study compares a portfolio of 90 “High Sustainability” organizations that have adopted a substantial number of environmental and social policies since the early to mid-1990s with a similar number of “Low Sustainability” companies that have adopted almost none of those policies.  Financial performance of the two groups is tracked for an 18-year period through the end of 2010.

“We document that sustainable firms are fundamentally different from their traditional counterparts with respect to their governance structure, the extent of stakeholder engagement, the extent of long-term orientation in corporate communications and investor base, and the measurement and disclosure of nonfinancial information and metrics,” the study says. “This is an important finding because it suggests that the adoption of these policies reflects a substantive part of corporate culture rather than purely greenwashing and cheap talk.”

The study – The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance – was authored by Robert G. Eccles, Professor of Management Practice at Harvard Business School; Ioannis Ioannou, Assistant Professor of Strategic and International Management at London Business School; and George Serafeim, Assistant Professor of Business Administration at Harvard Business School.

Performance Metrics

The authors report that an investment of $1 in the beginning of 1993 in a value-weighted portfolio of High Sustainability firms would have grown to $22.6 by the end of 2010, based on market prices.  In contrast, a similar investment in a value-weighted portfolio of Low Sustainability firms would have grown to only $15.4 by the end of 2010.

Using Return-on-Equity (ROE) accounting metrics, the study finds that an investment of $1 in the beginning of 1993 in book value of equity in a value-weighted portfolio of High Sustainability firms would have grown to $31.7 by the end of 2010, compared to only $25.7 for Low Sustainability firms.

Using Return-on-Assets (ROA) analysis, a $1 investment would have resulted in assets in a value-weighted portfolio of sustainable firms growing to $7.1 over an 18-year-period, compared to only $4.4 for a portfolio of traditional firms.

An equal-weighted portfolio of High Sustainability firms also outperformed a portfolio of traditional firms, according to the financial analysis.

Culture of Sustainability

At companies with sustainable business policies, the authors write, boards of director “are more likely to be responsible for sustainability and top executive incentives are more likely to be a function of sustainability metrics.”  In traditional firms, the study says, executive compensation based on short-term metrics “may push managers towards making decisions that deliver short-term performance at the expense of long-term value creation. Consequently, a short-term focus on creating value for shareholders alone may result in a failure to make the necessary strategic investments to ensure future profitability.”

“Firms in the High Sustainability group might outperform traditional firms because they are able to attract better human capital, establish more reliable supply chains, avoid conflicts and costly controversies with nearby communities, and engage in more product and process innovations in order to be competitive under the constraints that the corporate culture places on the organization,” the study says.

The study concludes:

Overall, we find evidence that firms in the High Sustainability group are able to significantly outperform their counterparts in the Low Sustainability group. This finding suggests that companies can adopt environmentally and socially responsible policies without sacrificing shareholder wealth. In fact, the opposite appears to be true: sustainable firms generate significantly higher profits and stock returns, suggesting that developing a corporate culture of sustainability may be a source of competitive advantage for a company in the long-run. A more engaged workforce, a secure license to operate, a more loyal and satisfied customer base, better relationships with stakeholders, greater transparency, a more collaborative community, and a better ability to innovate may all be contributing factors to this potentially persistent superior performance, even in the very long term.

In their final analysis, the authors pose several questions that are left unanswered: “What is the optimal degree of a culture of sustainability under various circumstances? Since sustainability involves tradeoffs, both across financial and nonfinancial objectives, and between nonfinancial objectives themselves, the firm cannot optimize across all of them. Choices need to be made.”   And, “since the choices a firm makes are dependent on the overall societal context, how will a culture of sustainability evolve as society evolves?”

When I started my career as an investment analyst in 1970, the idea that a company’s environmental and social activities would be important in helping predict its future financial and stock performance was seen as largely irrelevant. Well, not anymore!

Inclusive of governance issues and abbreviated as ESG (environmental, social and governance), factors pertaining to ESG are now included in mainstream corporate stock and bond analysis in numerous investment firms, funds and managers globally. Why? Because it provides analysts better insight into companies and a possibility of producing higher investment returns with less risk.

ESG has its beginnings in ethical and socially responsible investing (SRI), which have their roots in some religious traditions. Now, with mounting environmental and climate change concerns, ‘green’ or sustainable investing has emerged. It was with these asset classes that ESG issues first began to play a pivotal role. However, ESG issues are now becoming a significant factor in all asset classes.

Evidencing the enormous shift towards inclusion of ESG issues in investment analysis among global financial institutions, were the findings reported in a September 14, 2010, press release of the United Nations (UN) Principles for Responsible Investment (PRI). The PRI is a “ …framework to help investors achieve better long-term investment returns and sustainable markets through better analysis of environmental, social and governance issues in investment process and the exercise of responsible ownership practices.” Companies sign on as signatories to the PRI framework.

In the PRI press release, Executive Director James Gifford said, “every large, world-class listed company is now monitoring and reporting on its ESG performance, and so too are an increasing number of investors.” The PRI reported that, “total [PRI] signatory numbers… has jumped in the last year by more than 30 per cent… The value of the assets under management of PRI signatories now stands at $22 trillion, over 10 per cent of the estimated total value of global capital markets…”

Continuing, “signatories are now drawn from 45 countries… Over 95 per cent of asset owners and 87 per cent of investment managers have an overall investment policy that addresses ESG issues... The percentage of asset owners involved in dialogue with regulators on ESG issues rose to 85 per cent.”

And governments and regulators everywhere are listening. Countries that are taking big steps in promoting ESG issues in corporate reports include the USA, the UK, France and Sweden. Also, the European Union might soon have a policy for all member countries on ESG corporate reporting as well.

Even stock exchanges are becoming proactive on ESG issues concerning their listed companies. For instance, in South Africa, the Johannesburg Stock Exchange became the first exchange to require all listed companies to produce fully integrated financial and ESG reports. In Malaysia, its major stock exchange, the Bursa Malaysia, actively pursues ESG reporting among its listed companies.

As a result of such interest, especially by global investment institutions and individual investors, ESG stock and bond indexes are becoming commonplace everywhere. All the major stock/bond index producers—Dow Jones, FTSE, MSCI, S&P etc.—have global, continental, country and often even industry specific ESG stock indexes.

Encouraging the ESG cause are studies demonstrating improved financial, portfolio and stock performance where ESG factors are analytically applied. One study, published in March 2009 is by risklab, a division of Allianz Global Investors. It is “… a landmark study [that] strengthens the position of ESG advocates. The results reveal that a focus on ESG (environmental, social and corporate governance) factors can significantly reduce portfolio risk or enhance returns. The study… is the first systematic quantitative analysis explicitly examining ESG risk in a portfolio context… [it] concludes that investors ‘not only have a right to feel good about promoting ESG, but that clear financial benefits can be expected.”

Another study finds that, “… [ESG] improves portfolio diversification through a reduction of the average stock’s specific risk …ESG criteria probably leads best-in-class ESG screened funds to be better diversified than otherwise identical conventional funds… pension funds should at least contemplate about the use of ESG criteria, as an ignorance of ESG criteria could violate their fiduciary risk management duties.” (From, Portfolio Diversification and Environmental, Social or Governance Criteria: Must Responsible Investments Really Be Poorly Diversified? by Andreas G. F. Hoepner of the University of St. Andrews, School of Management, Principles for Responsible Investment, UN.)

And a third study also by risklab, reported in Global Pensions on April 18 found that ESG can reduce the risk of negative or ‘tail’ risk impacts on portfolios in emerging as well as developed markets. “ … The tail risk of an ESG risk neutral emerging market equity strategy defined by the MSCI Emerging Markets Index can be reduced from -64.5 per cent p.a. to -38.8 per cent. The same is true for corporate bonds defined by the Merrill Lynch Global Broad Market Corporate Index, it added, where the tail risk—measured as conditional value at risk (95 per cent) of the default strategy—can be reduced from -8.1 per cent p.a. to -4.9 per cent... [and for developed market equity, the] tail risk optimisation potential of the ESG neutral default strategy defined by the MSCI World Equity Index [went down] from -38.1 per cent p.a. to -25.7 per cent.”

With increasing social, environmental and climate change risks, it makes dollars and cents to now include ESG issues in investment decisions. And that is why asset managers and investors everywhere are adopting ESG criteria in the selection of individual stocks and bonds as well as aiding in their structuring of entire portfolios.

Ron Robins is Founder and Analyst at the website Investing for the Soul and a financial and economics columnist for alrroya.com, a leading Middle Eastern business portal/publication.

This article is reprinted with permission.  Copyright alrroya.com.

Timing is everything. Could there be a worse time than now be a CEO? First the world economic calamity shined a light into the dark corners of the banking and finance industries. The heads of powerful institutions were called on the carpet to explain a thing or two about credit default swaps and collateralized debt obligations. Then, after companies deemed "too big to fail" suddenly failed, stalwart CEOs from the automotive, banking, and insurance sectors had to ask the American people for a bailout. Reverberations of this catastrophe have cost the economy eight million jobs and counting.

As each headline about corporate malfeasance is juxtaposed against record profits and bonuses, Americans become more jaded about the ethics of today's business leadership. Many CEOs seem to lack the emotional awareness to deal with their own image problem. Goldman Sachs' CEO claimed to be doing "God's work" before settling a fraud suit to the tune of $550 million for pushing a product that was designed to fail, all in an effort to boost record profits. Meanwhile, the economy spiraled in. After the Gulf oil spill, former BP CEO Tony Hayward famously said: "I would like my life back," presumably echoing the sentiment of those who died during the explosion.

Robert Thompson put it this way: "About the only villains left are terrorists and CEOs--and terrorists will probably be portrayed as sympathetic long before CEOs."

It's no wonder CEOs are vilified in the press as power-crazed, money grubbing scoundrels. We used to be amused by Donald Trump's "You're fired!" on NBC's The Apprentice. With unemployment stuck at 10 percent (some say it's more like 22 percent), it's not funny anymore. Then you have Mr. Burns from The Simpsons, a maniacal CEO caricature. One of his favorite sayings is, "What good is money if it can't inspire terror in your fellow man?" What, indeed!

Still, when it comes to CEOs, we can't seem to get enough of our idolization of the culture of money. The Wall Street Journal recently published a list of the top-paid CEOs of the decade. With perfect sleight of hand, the article noted that four of the top ten highest-earning executives ran companies whose shareholders lost money over the decade. Lost money?

It's "pay without performance," says Jesse Fried, a law professor at Harvard University. It's also the title of Fried's book, which is subtitled, The Unfulfilled Promise of Executive Compensation.

On the bright side, with the collapse of the global economy, it seems we have finally reached a tipping point in changing the culture of business leadership. Recently, a group of American millionaires has called for an end to the tax breaks for the very rich. In the spring of this year, the Responsible Wealth Project was launched. The belief at the bottom of this initiative is that the wealthy can and should pay more to help support the dwindling budgets for education, health, and other critical social services at the state and federal levels.

What's more, corporate social responsibility (CSR) and socially responsible investing (SRI) are both on the rise, showing support for holding companies accountable for the new "Triple Bottom Line": people, planet, and profits.

I like to ask CEOs, Would you rather be known for how much money you made, or how much you gave away? Andrew Carnegie, once the richest man alive, believed in being remembered for the latter.

Today's CEOs are often portrayed as larger than life. The truth is, they are probably not quite so evil nor as brilliant as they made out to be. And once in a while, they do something that truly surprises us. This month, Warren Buffett and Bill Gates announced that 40 of America's wealthiest billionaires have signed a "Giving Pledge" in which the undersigned vow to give away half of their wealth to worthy causes during their lifetime. This seismic shift in wealth transformation exemplifies the best of America's culture of ingenuity and success. Put simply, Americans like it when the masters of the universe set a good example for the rest of us.

Ann Charles is CEO of BRANDfog, offering social media and Corporate Social Responsibility strategy for CEOs, and founder of The Great Leaders Conference, celebrating Great Leaders in CSR, Social Advocacy and Sustainability.

While catching up with old episodes of "Mad Men," I was brought up short by a show-stopping quote from Roger Sterling. Sterling, the senior partner at the Sterling Cooper Agency, tells Creative Director Don Draper that he's been invited to join an arts foundation board. Looking puzzled, Don asks "What does that mean?"

Without skipping a beat, Roger says "Philanthropy is the gateway to power."

Then he elaborated: "There are few people who decide what will happen in our world. You have been invited to join them--pull back the curtain and take your seat."

And so it was. For generations, traditional philanthropy was the exclusive domain of the wealthy and powerful. Many of the great benefactors of the early 20th century made their fortunes from the railroad, steel, and oil industries. These industrial giants sat on boards of nonprofit foundations that they themselves established to oversee how their treasure troves would be dispensed. They determined which causes were worthy. Much of the philanthropic activity was focused on large, sweeping gifts to benefit big institutions like the New York City Public Library, the ballet, universities, and art museums.

How times have changed. Many of today's entrepreneurs are building their businesses based on the idea of fulfilling a new kind of social contract, one in which organizations voluntarily take responsibility for the "triple bottom line": people, planet, and profits. While corporate social responsibility (CSR) is not a new concept, it has new meaning in a Web 2.0 world. For consumers, the Internet and social media deliver a kaleidoscope view of a company's corporate culture. Given this new insight, consumers are exercising their right to patronize companies with values that mirror their own.

Companies today have to address questions that are external to their core business. Does the organization have a moral compass? Does it support worthy causes? Is it a good corporate citizen? Stepping back and taking a fresh look also gives brands a great opportunity to redefine themselves and optimize for the future. It should come as no surprise to corporate America that CSR has become a talent magnet, a sales magnet, and an investor magnet.

How is CSR a talent magnet? Research is revealing the none too startling news that people want to work for caring and ethical employers. According to last year's study by Kelly Services Inc., acting in a socially and environmentally responsible manner is what it takes to gain top talent. Nearly 90 percent of respondents said they are more likely to work for an organization perceived as ethically and socially responsible. A more recent study opened eyes by revealing that one-third of workers would take a pay cut to work for a socially responsible firm.

How is CSR a sales magnet? Globally conscious consumers are changing the rules about consumerism. A 2010 CSR Branding Survey noted that consumers are much more likely to purchase a product with an "added social benefit." We are experiencing a trend in which consumers want companies to meet their needs and simultaneously have a positive impact on society. And why not? Enlightened consumers want their food to be organic, their coffee free trade, their purchases sustainable, and everything to be green. They are even willing to pay a premium for goods from socially responsible companies.

How is CSR an investment magnet? A slew of books and articles have come out recently that articulate the value of socially responsible investing, including the ubiquitous "Socially Responsible Investing for Dummies." The premise is that companies can do well financially by doing good. SKS Microfinance is an example of this concept. A recent New York Times article noted that SKS is aiming to raise $344 million in an initial public offering. This is being closely watched to determine if big profits can be made through the small micro-loans that are changing the lives of thousands of entrepreneurs in the developing world. The early financial results looks good. Socially responsible investment funds largely outperformed their benchmarks in 2009, according to Social Investment Forum data.

The corporate giants of our time are starting to follow in the footsteps of their industrialist predecessors. While yesterday's philanthropists were Getty, Guggenheim, Astor, and Carnegie, today's benefactors are Gates, Buffet, Turner, and Moore. These great leaders are working from a platform of social responsibility, and have started to address some of the most intractable problems of our time such as poverty, global illiteracy, and disease.

The next natural evolution of this trend is the new "social enterprise," a social mission-driven organization that applies market-based strategies to achieve a social purpose. In Andrew Carnegie's 1889 essay "The Gospel of Wealth," he stated that business and the wealthy are the caretakers of our future society. At the time Carnegie's ideas were the exception rather than the rule. Today, many small and large companies are still new to CSR. If the social enterprise enjoys financial success, CSR can become a fundamental principle for businesses rather than an afterthought.

To use a quote from Winston Churchill that even Don Draper would appreciate, "We make a living by what we get. We make a life by what we give."

Ann Charles is CEO of BRANDfog, offering social media and Corporate Social Responsibility strategy for CEOs, and founder of The Great Leaders Conference, celebrating Great Leaders in CSR, Social Advocacy and Sustainability.

Dear EarthTalk: What are some good resources out there for learning about investments that help the environment? -- Rob Johnson, Sherman Oaks, CA

The best green investing resources are available online, many for free. One good place to start is the Green Money Journal, which features a wide range of informative and free articles to help the individual investor make sense of the panoply of choices available when it comes to investing with the Earth in mind. Publisher Cliff Feigenbaum, also co-author of the book, Investing With Your Values (New Society, 2000), has been running the publication, first in print and now online, since 1992, and makes sure that each quarterly issue is chock full of tips and strategies for making a statement while making a buck.

Another great resource is SustainableBusiness.com’s online Progressive Investor newsletter. Publisher Rona Fried keeps each issue fresh with advice from leading green portfolio managers and other experts, and reports on trends in renewable energy and energy efficiency, green building, recycling, organic foods, healthy lifestyles, and more. Individual issues cost $21 or subscribers can get five issues for $112.

There are now also many green investing blogs. Tune in regularly to the Green Investing Times, which offers green investing strategies and tips as well as news and views on developments in the so-called “CleanTech” sectors. The Green Chip Stocks website also tracks news about clean and green companies. BusinessWeek’s Business Exchange blog features a live stream of up-to-the-minute posts pertaining to green business. For another perspective entirely, check out sites like Treehugger.com and Sustainablog, each which has unique takes on the latest and greatest in green technology and trends.

Some of the general finance and investing websites have also put together pretty good sections on green investing. Investopedia’s special feature on green investing offers dozens of articles, question-and-answer features and commentaries covering the gamut of options when it comes to investing with one’s values. The Motley Fool also runs information regularly pertaining to green investing.

If you don’t want to spend your days tracking the markets, you could leave it to the experts like the portfolio managers at Portland, Oregon-based Portfolio 21 Investments. The firm puts investor dollars to work supporting companies “developing cleaner and more efficient energy solutions, products designed to be reused and rebuilt, and processes that eliminate the need for toxic inputs while producing little or no waste.” The firm’s global equity mutual fund is open to individual investors willing to put in at least $5,000, while the minimum on retirement accounts is only $1,000.

There are other green mutual funds out there, too, of course, that screen the stocks they pick according to environmental and social responsibility standards. Domini, Calvert, Sustainable Asset Management, Pax World and MMA Praxis all have offerings targeting specific industries and general green performance.

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Wall Street analysts who issue “buy” and “sell” recommendations on publicly-held companies are increasingly awarding more favorable ratings to firms with corporate social responsibility (CSR) practices, according to a new academic study.

The study - The Impact of Corporate Social Responsibility on Investment Recommendations by Ioannis Ioannou, an Assistant Professor at the London Business School and George Serafeim, an Assistant Professor at the Harvard Business School – examined how social performance ratings for companies affected the recommendations of “sell side” analysts in the United States.

“Sell-side” analysts typically work for brokerage firms and issue research and recommendations that are generally made public. (“Buy-side” analysts typically work for mutual funds, pension funds or other large investors; their research is generally not made public.)

The study examined data on 4,109 companies over a 16-year period.  It found that from 1993-1997 a company’s CSR strength had a “significant negative impact” with sell-side analysts.  Since 1997, however, the perception has become more positive.

“As time goes by, CSR strategies are perceived to be value-creating, potentially more legitimate, thus uncertainty about future cash flows and profitability is reduced and, analysts assess CSR initiatives more accurately,” the authors write.

The authors suggest several reasons why CSR strategies might affect sell-side analysts’ recommendations. “If CSR affects a firm’s long-term financial performance by creating (or destroying) value for a broad range of stakeholders, including customers, employees and competitors, then the resulting changes in financial performance will have a direct impact on analysts’ recommendations,” they write.

Another reason, according to the authors, is the rapid growth of socially responsible investing.  They report that in 2007 mutual funds investing in socially conscious firms had assets under management of more than $2.5 and $2 trillion dollars in the U.S. and Europe respectively. Socially conscious funds in Canada, Japan and Australia held $500 billion, $100 billion and $64 billion respectively. Funds in the U.S., U.K. and Canada grew by $400 billion, $600 billion and $400 billion respectively, between 2001 and 2007, according to the study.

Companies with “higher visibility” receive more favorable recommendations for their CSR strategies, the study found, while “analysts with more experience, broader CSR awareness or those with more resources at their disposal, are more likely to perceive the value of CSR strategies more favorably.”

While “the issue of whether CSR strategies result in value creation is by no means decided,” according to the study,  perceptions of Wall Street analysts should be considered carefully by company management.

The authors write: “Top executives and managers interested in implementing CSR strategies in their organizations should be aware that negative analysts’ reactions, and subsequent value destruction in capital markets is a real possibility when they initially attempt to implement such strategies.  Managers should particularly focus on communicating the value of CSR strategies to the investment community. Highlighting short term costs but also long-term benefits could mitigate difficulties that investors may face in understanding the value generated through such activities and might expedite the adjustment of their valuation models to these new CSR-augmented business models.”

Investors filed a record 101 climate and energy-related resolutions with 88 U.S. and Canadian companies in 2010, a 50% increase from the year-earlier, according to activist shareholder organizations.

A record 51 resolutions were withdrawn after the companies agreed to climate change and energy-related commitments.

Sixteen of the 42 resolutions that went to a vote achieved 30 percent or greater support, nearly three times the number that achieved that level of support in 2009.   The average vote for the 42 resolutions voted on so far this year was 24.6 percent, up from 21.7 percent last year.

The statistics were compiled by Ceres, a coalition of investors and environmental groups, and the Interfaith Center on Corporate Responsibility (ICCR), a coalition of nearly 300 faith-based institutional investors.

”The BP spill is only the latest reminder of why investors are ratcheting up their attention to climate and other environmental risks across their portfolios,” said Mindy Lubber, president of Ceres. “This year’s record results send a powerful message that companies should boost their attention to these issues.”

“If our portfolio companies are to provide long-term shareowner value, they need to be proactive, not reactive, in addressing climate change and other ESG matters,” said Jack Ehnes, CEO of CalSTRS, the second largest pension fund in the U.S.   Mr. Ehenes said the record results for shareholder filings in 2010 are “an encouraging sign that investors and companies are paying increasing attention to long-term drivers of value.”

Among the resolutions, requests for companies to provide a corporate responsibility or sustainability report have “increasingly resonated with investors,” according to Tim Smith, Senior Vice President for Walden Asset Management.  He  pointed to a  record 60 percent vote at Layne Christensen and votes at Gentex and St. Jude in the low 30s and low 40s, respectively. “We believe this signals a tipping point for the case for transparency on CSR,” he said.

Correction 7/26: An earlier version of this story incorrectly reported the comments of Walden Asset Management’s Tim Smith in discussing vote results at Gentex.

The issues with key high votes and share value of votes in favor, according to Ceres and ICCR, were:

Adopt greenhouse gas (GHG) reduction goals:
CMS Energy, 35.1%  ($729 million)
ExxonMobil, 27.2%   ($39.7 billion)
Massey Energy, 53.1% ($852 million)
Ryland, 37.4%  ($234 million)

Issue a sustainability report including GHG reduction strategies:
Boston Properties, 44.1%  ($3.2 billion)
Chesapeake Energy, 31.5%  ($2.4 billion)
EQT Corporation, 37.4%  ($1.4 billion)
Federal Realty Investment Trust, 44.6%  ($1.4 billion)
Layne Christensen, 60.3%  ($234 million)
St. Jude Medical, 42.8%  ($3.1 billion)

Report on the environmental and health risks associated with coal ash:
CMS Energy, 43.1%  ($875 billion)
MDU Resources Group, 40.5%    ($962 million)
The Southern Company, 21.0%  ($2.6 billion)

Report on risks posed by the environmental, social and economic challenges associated with oil sands operations:
ConocoPhillips, 27.1%  ($13.8 billion)
ExxonMobil, 26.4% ($38.3 billion)

DiNapoli said he has hired the law firm of Cohen Milstein Sellers & Toll to represent the Fund. “It’s my duty to protect the interests of the Fund and the retirees and employees who rely on it,” DiNapoli said. “BP misled investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we’re going to hold it accountable.”

DiNapoli said he is seeking to lead the class action against BP “to give the Fund and other investors their best chance at recovering damages sustained from the decline in shareholder value subsequent to the Deepwater Horizon explosion and oil spill.” DiNapoli said the Fund held more than 19 million shares at the time of the event.

The New York State Common Retirement Fund provides benefits to more than one million active and retired state and local government employees, police officers, and firefighters.

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