On a quarterly basis mutual funds that fall into Morningstar’s socially responsible investing category improved in performance during the second quarter vs. the universe of funds that Morningstar follows, but on average didn’t shine in their respective categories.

Socially responsible investing funds were up 16.49 percent on average for the three-months ending June 30. Overall they finished in the 49th percentile of Morningstar funds, meaning that the performance of those funds placed them just barely into the top half of their categories on average.

But as always there is a wide range of results in total return among the funds that fall in the SRI category. One exceptional fund is the Appleseed Fund (APPLX), which was up 26.80 for the quarter and 24.84 percent year-to-date through the end of June. That put it at the top of Morningstar’s list of all mid-cap value funds. The Appleseed Fund is a no-load fund with a 0.90 expense ratio and about $27 million in assets under management.

Another fund that that had a strong quarter was the Parnassus Workplace (PARWX), which was up more than 26 percent for the three months, putting it in the first percentile for large cap growth funds. Year-to-date the fund, which invests in companies that have “great workplaces for their employees,” according to the firm, is up 23.2 percent, 14th among all large-cap growth funds. Parnassus Workplace is a no-load fund with about $34 million in assets under management.

Winslow Green Growth (WGGFX), a small-cap growth fund that invests primarily in environmentally sustainable companies, was up 36 percent for the quarter, placing it in the second percentile for small-cap growth funds. Winslow defines sustainable companies as those with “clean and efficient business practices that seek to minimize their environmental impact, or companies whose products or services offer solutions to environmental problems.” Like many environmental funds, Green Growth has not done so well longer-term, down 39 percent on a 12-month total return basis, placing it in the 95th percentile of small-cap growth funds.

Among the funds that did not rank as well for the second quarter was Calvert’s Mid-Cap Value (CMVAX), down 11.34 percent but in the 95th percentile among mid-cap value funds for the period, though in the 44th percentile on a 12-month basis; the CRA Qualified Investment fund (CRAIX), up 0.71 percent for the quarter which put it in the 97th percentile among Morningstar’s intermediate-term bond funds, though still up 6.50 percent for the prior 12 months and in the 17th percentile over that period; and the Integrity Growth & Income fund (IGIAX), which was up 9.9 percent for the quarter, putting it in the 97th percentile for mid-cap blend funds. Over a 12-month period Integrity was down 26 percent, putting it in the 36th percentile.

There really wasn’t anything unexpected about the Securities and Exchange Commission’s vote on July 1 to require companies receiving money from the Troubled Asset Relief Program (TARP) to provide a shareholder vote on executive pay in their proxy solicitations. In fact they were already following a lead set by President Obama in requiring compensation restrictions on senior managers.

But it is another boost for the “say-on-pay” movement that many socially responsible investors support as a way for shareholders to have a stronger voice in executive compensation at their companies. And while the Commission’s vote was limited just to TARP recipients, it’s followed by a 60-day comment period in which say-on-pay supporters are planning to urge the commissioners to extend the requirement to all public companies.

“The problems with executive pay are not just with TARP companies,” says Timothy Smith, senior vice president of Walden Asset Management in Boston and an advocate for say-on-pay. “We think this advisory vote should be required of all companies. That does not imply we think a majority of companies have comp problems. But there’s a significant enough cross-section of problems that they need to be addressed and this gives us one tool to do so.”

Say-on-pay is a shareholder activist strategy in which a company’s shareholders are allowed to vote on the compensation of its top executives. The vote is advisory only and does not compel a board to change its compensation practices. But proponents believe the passage of such advisory measures will encourage more dialogue between management and shareholders and prompt changes to compensation packages if stockholders believe they are excessive for one reason or another.

The Obama administration has already acted to restrain compensation packages for the highest-paid employees at large financial institutions that have received taxpayer bailout money through the TARP. A “pay czar,” as some have termed the position, has been appointed to approve compensation packages for the highest-paid employees at Bank of America Corp., American International Group Inc. and other large institutions that received bailout funds.

Say-on-pay proponents are also looking to Congress, arguing that there is a link between huge pay packages and the risky business behavior that lead to the financial crisis of late last year and this spring. There they hope that legislation that passed the House last year but died in the Senate, and which extends the TARP requirement to all public companies, will win full passage.

Smith says there are about 100 say-on-pay resolutions that shareholders will vote on at corporate annual meetings this year. So far the average vote is about 47 percent in favor of the resolution, with 19 actually approved, meaning they received more than 50 percent.

Citigroup is reportedly planning on raising salaries to its employees by as much as 50 percent as a way to offset smaller annual bonuses. “Bonus,” as it relates to Wall Street, has become a dirty word in the media. When the stock market was crashing in late 2008 and early 2009, as the economy went into a tailspin and while millions of jobs were lost, bonuses paid to top executives and employees of financial services firms – whom many claimed touched off the crisis – seemed obscene.

It’s worth remembering that plenty of people who worked in the financial services sector have been laid off and most of them weren’t involved in the excessive risk taking that politicians and economists say occurred. Nor were most of the people who still hold jobs in that industry the geniuses who put firms such as Citigroup in a position where they needed billions of dollars in taxpayer funds to help them stay afloat last year. Plus there were widespread pay cuts for those who remained employed. In other words, much of the scorn that is heaped upon companies in businesses such banking, investment management, insurance and investment banking is misplaced.

Still, at a time when President Obama is conceding that the nation’s unemployment rate will likely exceed 10 percent before it starts to decline, here’s Citigroup, a firm that is 34 percent owned by taxpayers, devising ways it can get the bonus money to its employees just not by that name. And it isn’t alone. According to Johnson Associates, a New York compensation consulting firm, compensation industry-wide will be up 20 to 30 percent this year. Total industry pay would still be below the record levels of 2007, but that’s still a big raise.

But what’s wrong with that? One of the red flags that socially responsible investors look for is top-heavy executive compensation, while the rank-and-file share in only a small amount of the profits. These firms are trying to restore pay levels and retain their best employees.

It amounts to a PR blunder, to say the least and the impression that Wall Street firms really don’t care what’s happening with the rest of America. As an example, NBC’s Today Show did a seven-minute report on Citgroup’s raises featuring a clip from the 1980s movie “Wall Street” in which Gordon Gekko, the character played by Michael Douglas, declares “greed is good.”

The likelihood is that there are other sectors and companies within those sectors that are managing to have a pretty good year so far. Their top executives will receive healthy bonuses and their workers will get raises – perhaps in amounts some people consider outlandish. But they’ll go unnoticed because they don’t have the spotlight on them that many Wall Street companies have brought upon themselves.

I’ve asked the question before: can you be an environmentally-responsible investor – or even just an environmentally responsible person – and accept nuclear power as part of the world’s energy mix? Evidently the Obama administration believes you can.

The federal Energy Department is expected to award a series of loan guarantees and licenses to four nuclear power companies in an effort by the government to jump start the nuclear power industry in the U.S. If all proceeds according to schedule, the companies would start building reactors sometime in 2011 and have them ready to come on line in 2015 and 2016.

What’s the issue for socially responsible investors? Historically they have opposed nuclear power because of safety and environmental concerns. The near-melt down of the reactor core at the Three Mile Island facility in Pennsylvania in 1979 and the problem of disposing of radioactive waste, made nuclear power plants unacceptable. Clean energy sources such as wind, hydro and solar were better alternatives.

But we’ve reached a point in the climate crisis where nuclear energy has become a more acceptable approach – even with a strong alternative energy backer such as President Barack Obama - to reduce carbon dioxide emissions. Additionally other countries, including Japan and France, have aggressively developed their nuclear energy capacity. About 75 percent of the electricity produced in France, for example, is generated by nuclear power, compared to one-fifth in the U.S., according to the Wall Street Journal.

We’re socially responsible investors on this site. We invest by including our personal principles with traditional research. If you are someone who believes nuclear energy is in conflict with the environment you have a solid argument. If you believe nuclear energy is needed to reduce greenhouse gases, here are the four companies first in line for federal loan guarantees: Unistar Nuclear Energy, a subsidiary of Constellation Energy; NRG Energy Inc.; Scana Corp.; and Southern Co.