Socially Responsible Investing in the US and Europe: Same Goals But Different Paths

March 13, 2007

Abstract

Paris, France 13 March 2007

SRI is a booming market in both the US and Europe. Celent predicts that the SRI market in the US will reach $3 trillion by 2011, and the European SRI market grew from €1 trillion in 2005 to €1.6 trillion in 2007.

Source: Social Investment Forum Foundation, Celent

The market for socially responsible investing (SRI) is becoming more mainstream in both the US and Europe, but the markets are developing in different ways. In the US shareholder advocacy has become a dominant part of modern SRI, while sustainable development has been important in Europe. In the report, , Celent provides an overview of the major trends concerning SRI, emphasizing the main strategies.

"SRI is becoming a major concern for both retail and institutional investors on the two sides of the Atlantic, and thus, the financial services industry could offer adapted solutions that meet these investors' needs," says Perrine Fiorina, analyst in the Securities & Investments group at Celent and author of the report.

SRI includes all initiatives that integrate extrafinancial criteria in the investment decision process and portfolio management. Even though strategies and investors' concerns differ both between continents and among European countries, SRI generally takes three forms: screening, shareholder advocacy, and community investing.

To have a better understanding of SRI, this report defines sustainable development, corporate social responsibility (CSR), and the main internationally agreed-upon principles, codes of conduct, and certification schemes.

Moreover, this report analyses the major sustainability analysis organizations (SAOs), which are designed to evaluate and measure the extrafinancial performances of corporations.

The 30-page report contains nine charts and five tables. A table of contents is available online.

Members of Celent's research services can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Paris, France 13 March 2007

Executive Summary 3
Introduction 5
Socially Responsible Investing: Definition and Concepts 6
  Major Concepts 6
  Internationally Agreed-Upon Principles and Codes of Conduct 8
Development of SRI in the US and Europe 11
  Overview of SRI in the US 11
  European SRI Market Overview 13
Main SRI Strategies in the US and in Europe 15
  Screening Strategies 15
  Shareholder Advocacy 17
  Community Investing 19
Extrafinancial Evaluations 22
  Sustainability Analysis Organizations and Indexes 22
  Major CSR Standards and Reporting Frameworks 25
Conclusion 28
Objectivity and Methodology 29

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