Ethical investment
Warm and fuzzy
Jul 12th 2001
From The Economist print edition
http://www.economist.com

Abstract:

The recent spate of interest by large pension funds and money managers in "socially responsible" or "ethical" investing has sparked a debate over its legitimacy and effectiveness. Skeptics are critical of the screens used in socially responsible investment (SRI) funds and question their ability to produce returns for shareholders. The success of the Domini Social Equity Fund is proof positive that socially responsible investing can deliver returns. The main issue for critics then lies in the screening methods. Most funds use negative screens which critics claim work only to "ostracize" companies and do nothing for true reform. Corporate governance expert Robert Monks agrees; shareholders and customers need to be active and exert pressure to bring about change within companies.

This article can be found in its entirety in the July 14th edition of The Economist magazine.