Responsible Investors are Calling for Systemic Reform

January 14, 2009 - New York City

Institutional investors were speaking passionately about the need for deep reform of financial systems this week at the 3rd Annual Forum on Responsible Investing. The event took place January 12-13, 2009 at the Union League Club in New York City, and was strongly attended by all facets of the financial community, including foundation representatives, pension fund managers, research firms, consultants and student activists.

Conversations centered around the global credit crunch, and the recognition that ‘business as usual’ is no longer an option for institutional investors. Foundations, such as Tides Foundation and The Edward W. Hazen Foundation, have seen their holdings decimated in recent months, and are moving away from the common practice of hiring traditional managers to generate high growth at any cost for philanthropy purposes. Instead, they are shifting their assets into investment options that are complementary to their mission and social values in an attempt to ‘do well by doing good’. Socially responsible mutual funds, asset managers and insurance groups, like Calvert, Trillium and Aviva, are also examining their portfolios in a new light, using positive corporate ESG performance as a proxy for good management in an attempt to make wise long-term investments. Several speakers, including Michael Musuraca, Designated Trustee of New York City Employees Retirement System, were so appalled with the greed and short-term thinking prevalent in traditional portfolio management that they lashed out against mainstream managers and economists. Sarah Stranahan, Trustee of The Needmor Fund, said, “the only thing worse than the collapse of the market would have been its continued success“. They prescribed an emboldened US financial regulatory system that would implement incentives for greater cooperation, transparency and ethical decision-making. A call for action was sounded by stakeholders such as the Responsible Endowments Coalition, who are tired of listening to mission-related investors and hearing lots of theoretical talk, without seeing any practical walk.

Although a sense of frustration and urgency permeated the forum, the conference hall was also full of hope that the incoming Obama administration was presenting a once-in-a-generation investment opportunity to profit from the emergent Green Economy. Participants discussed sustainable solutions from non-profits, corporations and governments that encouraged eco-efficiency, while providing a strong economic and social return on investment. Moreover, they exchanged investment strategies that had the dual goals of generating a reasonable financial return, and of creating a better future.


The 3rd Annual Forum on Responsible Investing was organized by Institutional Investor Events, and was sponsored primarily by Calvert Investments and KLD Research & Analytics.

Timothy Jack Nash is a member of the Ethical Markets Sustainability Research Group.