Socially Responsible Investing (SRI) is hot. Over the last ten years, the SRI segment of the total U.S. investment pool “rose more than 324 percent from $639 billion in 1995 to $2.71 trillion in 2007” to become 10.8 percent of the total investment assets under professional management by major financial institutions. (Social Investment Forum (SIF), 2007 Report on Socially Responsible Investing Trends in the United States) Investment Company Institute’s research indicates that the entire investment universe of all Exchange Traded Funds (ETFs) just broke $600 billion in May 2008. SIF also reports that, from 2005 to 2007, SRI investments increased “more than 18 percent while the broader universe of professionally managed assets increased less than three percent.”

So what is going on? Al Gore’s film, An Inconvenient Truth, climate change, toxic chemicals in toys from China, and the genocide in Darfur have all combined to create a shift in public attitudes. As a result, today SRI is rapidly evolving. Andrew Bloom, 2nd senior vice president, Wealth Management at Smith Barney says, “When you get into SRI, and you will, do your homework so you understand what you are buying.” Well, investors are buying and in record numbers as they demand that their values be applied to their investments. The smart companies are paying attention. ...

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