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Teaching SRI

  • 1.  Teaching SRI

    Posted 04-05-2006 12:35
    First, let me say how pleased I am at the prospect of someone teaching SRI within a course framework. As someone who's been talking about SRI for 18 years to audiences from undergraduates to pension fund trustees to investment bankers, I can appreciate the challenge.

    Our website has a wealth of information and resources from which you could draw. The Resources section http://www.kld.com/resources/index.html has a 35+ page bibliography that includes some teaching materials. Also, the archives of our newsletter, 'Newsline', http://www.kld.com/newsletter/Newsline/index.html have articles appropriate for introductions to SRI on things such as definitions of SRI, examining performance, etc. We've also devoted considerable effort to stripping away the mystery from 'screening'.

    I differ with Nigel on the relationship of SRI and CSR. Because of their reference points -- the individual or institution vs. the company -- they are not to be equated or conflated. The two are quite distinct -- historically and practically -- though they ally often. The social investor buys companies that don't fail his/her/its standards, not 'socially responsible companies'. We did a white paper last fall on the evolving nature of SRI, its relationship to CSR, the emergence of the ESG focus, etc. http://www.kld.com/resources/papers/SRIevolving050901.pdf

    Finally, based on the problems we've encountered talking about SRI, we developed a pocket guide to SRI. It features a lengthy glossary, a description of KLD's screens, some discussion of performance using our indexes, etc. Anyone on the list who'd like one, please let me know. If it is suitable for your students, we will be happy to supply you -- at no charge -- with as many as you need for your classes. The one thing that all the audiences (outside the SRI industry) I've talked to have in common is the need for clear, up front definitions of the terms we use.
    ***************************************************************************
    Peter D. Kinder
    KLD Research & Analytics, Inc.
    250 Summer Street, 4th Floor
    Boston, MA 02210
    +1 617.426.5270 http://www.KLD.com

    The social object of skilled investment should be to defeat the dark forces of time
    and ignorance that envelop our future. The actual, private object of the most
    skilled investment today is 'to beat the gun', as the Americans so well express it,
    to outwit the crowd, and to pass the bad, or depreciating half-crown to the other
    fellow. -John Maynard Keynes (1936)
    ****************************************************************************


    -----Original Message-----
    From: Organizations and the Natural Environment Discussion
    [mailto:ONE-L@AOMLISTS.PACE.EDU]On Behalf Of roome@FSW.EUR.NL
    Sent: Wednesday, April 05, 2006 9:59 AM
    To: ONE-L@AOMLISTS.PACE.EDU
    Subject: Re: SRI


    Hi Magali,

    How are you? As for SRI here are some thoughts off the top of my head.

    I can envision at least four classes on this topic.

    1. Identifies the nature of SRI as part of the social movement that is CSR
    thinking and practice. The key point here is that it is part of the
    contemporay 'system' or social architecture of CSR. in contrsat to the
    past where enviornmental behaviour and basic social standards were set by
    command-and-control government the emergence of SRI is part of the the
    markets response to CSR.

    2. Logically this would be followed by a more detailed account of how SRI
    funds operate - their use of expert screening boards, screening mechanisms
    and so on. This might include comment on their attraction to investors
    and their alignment with CSR principles in their own behaviour. Funds of
    course divide between those driven by CSR committeed banks and financial
    institutions and those that are simply part of the portfolio of otherwise
    unreconstructed finance houses (simply offering SRI funds because there is
    demand for these products);

    3. This itself could be followed by a class with a more critical
    perpsective on SRI. The argument might be that SRI funds outperform
    conventioanl funds. You would expect this if SR practices were an
    indicator of the quality of maanagement. How then are SRI included
    companies screened? In addition, if we assume (as I do) that corportae
    responsibility requires innovation and that innovation is risky so we
    would expect that some SRI companies would be more successful than
    ordinary companies but others would be failures. How does this affect SRI
    performance.

    On the critical front you could also address the linguistic deception
    involve in some well-know (globally visible) SRIs that call themselves
    sustainability funds when at best they include companies that have managed
    to simply reduce their impact on the planet. Do these funds help or
    hinder progress?

    4. It would be fun and maybe even useful to set up a role play for a class
    to identify the interest and position of SRI 'stakeholders'. This might
    include fund managers, SRI (analysts and screening agencies), companies
    both those in and those out of these funds, investment communities,
    investors etc. Write a vignette on each stakeholder and invite student
    groups to consider the SRI phenomenon from the perspectives of one of the
    groups and discuss the outcomes.

    Nigel Roome


    > Hi Magali. I can't help you out with a syllabus, but I can suggest a few
    > articles you might want to include in one. Here's one on SRI I have
    > forthcoming at SMJ that runs through the arguments, pro and con, for SRI,
    > and finds an answer that sort of bridges these two positions:
    >
    > http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950
    >
    > More student friendly might be the 2003 debate in O&E on the topic,
    > between Jon Entine, Sandra Waddock, and me & my co-author, Rob Salomon.
    > Here's a link to our portion of this debate:
    >
    > http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070
    >
    > I hope these will be of interest. And I hope you'll share with us
    > whatever you come up with for a syllabus.
    >
    > Best,
    > Mike
    >
    > ********************
    > Michael L. Barnett, PhD
    > University of South Florida
    > College of Business Administration
    > Department of Management & Organization
    > 4202 E. Fowler Avenue, BSN 3527
    > Tampa, FL 33620-5500
    > Phone: 813-974-1727
    > Fax: 813-974-1734
    > Webpage: http://www.coba.usf.edu/barnett
    >
    > View my research on my SSRN Author page:
    > <http://ssrn.com/author=414796>
    >
    >
    > ________________________________
    >
    > From: Organizations and the Natural Environment Discussion on behalf of
    > Gordon P Rands
    > Sent: Wed 4/5/2006 2:14 AM
    > To: ONE-L@AOMLISTS.PACE.EDU
    > Subject: Re: SRI
    >
    >
    >
    > Magali -
    >
    > I always do one session on SRI in my business & society course, basically
    > using online material from the Social Venture Network (they have biennial
    > reports on the amount of money under investment) and annual reports on SR
    > mutual funds' screens and performance. I also show a video on Vermont
    > National Bank to introduce students to the topic of community-based social
    > investing. Shorebank Pacific would be a better example today, but I don't
    > think there is a video about them.
    >
    > Gordon
    >
    > Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:
    >
    >> Dear Colleagues,
    >>
    >> Has anyone developed an elective course on Socially Responsible
    >> Investing
    >> (SRI)? Or maybe integrated a few sessions on SRI in a course? I am
    >> looking
    >> for syllabi on the subject.
    >>
    >> Thanks
    >>
    >> Magali
    >>
    >> Magali Delmas
    >> Assistant Professor
    >> Donald Bren School of Environmental Science and Management
    >> University of California, Santa Barbara
    >> CA 93106-5131
    >> Phone (805) 893-7185
    >> Email: delmas@bren.ucsb.edu
    >> http://www.bren.ucsb.edu/~delmas/
    >>
    >