The popularity of socially responsibility investing is surging in the United States, as an increasing number of social-minded investors have focused on where their dollars are going and the investment industry has expanded to meet those concerns.
In addition to growth in the number of mutual funds that invest using socially responsible principles and anecdotal evidence such as increased media coverage of the approach, two studies provided hard numbers about socially responsible investing.
The Social Investment Forum’s most recent biennial study found that socially responsible investing is growing at a faster pace than the broader universe of all investment assets under professional management. Roughly 11 percent of assets under professional management in the U.S. – nearly one out of every nine dollars – are now involved in socially responsible investing.
Since 1995, when the Social Investment Forum conducted its first Report on Socially Responsible Investing Trends in the United States, social investing assets have risen more than 324 percent from $639 billion to $2.71 trillion in 2007. During the same period, the broader universe of assets under professional management increased less than 260 percent from $7 trillion to $25.1 trillion.
A more recent study by Robeco Investment Management and the management consulting firm Booz & Company estimates that the “responsible investment” market will become “mainstream” within asset management by the year 2015, reaching between 15 percent and 20 percent of total assets under management.
The report also said that at the end of 2007, global responsible investment assets under management were up to $5 trillion or roughly 7 percent of total assets under management. The study estimates that global responsible investment has been growing at a rate of 22 percent per year since 2003.
That responsible investment growth is expected to grow by 25 percent per year during “the next few years,” according to the report, driven by increased awareness among companies of their social responsibility, increasing prices in energy and raw materials, growing media attention to environmental, social and governance issues and ongoing changes in legislation.