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Please Everyone cannot we turn this ongoing debate around a bit: rather
than focus on whether an SRI does better/worse financially than
supposedly non-SRI funds/indexes, let's discuss what good these
investment approaches are doing for the state of the global environment.
By how much has corporate water use been reduced and how much of that
reduction can be "traced" to the actions of SRI? Same for solid waste
reduction/pollution prevention, reduction in toxic chemical use...etc.

In many ways it can be likened to a discussion of the effectiveness of
ISO 14K, how has this strategy contributed to improvements in
environmental quality and financial performance...

We at EPA are constantly being challenged to show how US environmental
regulations are contributing to environmental quality and protection of
human health without "undermining" the viability of the US economy...
the SRI community should be held to the same standard.

Dinah Koehler, Sc.D.
Economics and Decision Sciences Research
National Center for Environmental Research
Office of Research & Development

Mail address:
U.S. Environmental Protection Agency
290 Broadway
Mail Code: 2 OPM-PPEB
26th Floor
New York, NY 10007
(212) 637-3573
(202) 343-9687

Courier Delivery Address:
USEPA, NCER
Room 3319E Woodies Bldg
1025 F Street NW
Washington, DC 20004-1409

Dinah:

Your motivation is great, but even the way you phrase your comment is
ideologically loaded.

The fact is, it's quite possible--I personally believe likely--that many of
these SRI "investment approaches" do the very opposite of "doing good for
the state of the global environment."

You assume SRI is by definition "good" or "progressive". The evidence in
many areas, from corporate governance, to supply chain analysis, to energy
suggests that SRI funds are very sloppy and often flat out wrong in
identifying "doing good."

Consider the risk/risk issues and cost/benefit issues involving nuclear
energy, fossil fuels and so-called alternative fuels. One of the largest SRI
firms in the world is currently going through an internal exercise by
seriously considering dumping/modifying SRI dogma on nuclear energy--not
because they think it's risk free, but because they are trying to break
through ideological shackles that divides the world into good and bad. They
are doing what should always be done...risk/risk and cost/benefit analysis,
instead of using the 19th century SRI litmus tests standards.

I know you're work...it's very nuanced. That's why I was so taken aback by
the way you posed this question. Why don't you just say:

"Let's discuss what these SRI indices actually measure, how they identify
firms with different environmental outputs, and then do appropriate
empirical analysis (based on clearly stated assumptions) about the benefits
and potential negatives of those stock choices (you still have to get over
the hurdle that buying and selling stocks of companies fall into any
specific category, whether SRI or sin stocks or whatever--has ANY influence
at all on the stock market---to date, there is absolutely no consistent
evidence that it does).

Jon


On 9/14/06 9:54 AM, "Koehler.Dinah@EPAMAIL.EPA.GOV"
<Koehler.Dinah@EPAMAIL.EPA.GOV> wrote:

> Please Everyone cannot we turn this ongoing debate around a bit: rather
> than focus on whether an SRI does better/worse financially than
> supposedly non-SRI funds/indexes, let's discuss what good these
> investment approaches are doing for the state of the global environment.
> By how much has corporate water use been reduced and how much of that
> reduction can be "traced" to the actions of SRI? Same for solid waste
> reduction/pollution prevention, reduction in toxic chemical use...etc.
>
> In many ways it can be likened to a discussion of the effectiveness of
> ISO 14K, how has this strategy contributed to improvements in
> environmental quality and financial performance...
>
> We at EPA are constantly being challenged to show how US environmental
> regulations are contributing to environmental quality and protection of
> human health without "undermining" the viability of the US economy...
> the SRI community should be held to the same standard.
>
> Dinah Koehler, Sc.D.
> Economics and Decision Sciences Research
> National Center for Environmental Research
> Office of Research & Development
>
> Mail address:
> U.S. Environmental Protection Agency
> 290 Broadway
> Mail Code: 2 OPM-PPEB
> 26th Floor
> New York, NY 10007
> (212) 637-3573
> (202) 343-9687
>
> Courier Delivery Address:
> USEPA, NCER
> Room 3319E Woodies Bldg
> 1025 F Street NW
> Washington, DC 20004-1409

Certainly my question was slanted toward demonstrating environmental
improvement because that is what I would like to see and that is the
litmus test all SRI funds need to face and hopefully pass. In other
words let's focus on whether SRI is achieving its purported mission: to
improve "social" performance not merely individual/private finanical
performance.
Lots of nuance there no doubt...

Risk/risk and cost/benefit analysis is certainly the most effective
manner to proceed, but as those who have attempted this will know, very
difficult to do well.
We would need to agree on what is at risk and how do we properly valuate
these risks financially to be able to balance net costs and benefits.

That is not a traditional "financial" or organizational behavior
question, that is a fundamentally matter of environmental/social risk
assessment and environmental economics (what is the value of eco-system
services for example). Who on ONE has this background to share some
insights, particularly as it pertains to individual firm contribution to
the problem and solution?

Dinah Koehler, Sc.D.
Economics and Decision Sciences Research
National Center for Environmental Research

Mail address:
U.S. Environmental Protection Agency
290 Broadway
Mail Code: 2 OPM-PPEB
26th Floor
New York, NY 10007
(212) 637-3573
(202) 343-9687

Courier Delivery Address:
USEPA, NCER
Room 3319E Woodies Bldg
1025 F Street NW
Washington, DC 20004-1409



Jon Entine
<runjonrun@EARTH
LINK.NET> To
Sent by: ONE-L@AOMLISTS.PACE.EDU
Organizations cc
and the Natural
Environment Subject
Discussion Re: let's change the tune a bit
<ONE-L@AOMLISTS. shall we... back to environmental
PACE.EDU> outcomes


09/14/2006 12:15
PM


Please respond
to
Organizations
and the Natural
Environment
Discussion
<ONE-L@AOMLISTS.
PACE.EDU>






Dinah:

Your motivation is great, but even the way you phrase your comment is
ideologically loaded.

The fact is, it's quite possible--I personally believe likely--that many
of
these SRI "investment approaches" do the very opposite of "doing good
for
the state of the global environment."

You assume SRI is by definition "good" or "progressive". The evidence in
many areas, from corporate governance, to supply chain analysis, to
energy
suggests that SRI funds are very sloppy and often flat out wrong in
identifying "doing good."

Consider the risk/risk issues and cost/benefit issues involving nuclear
energy, fossil fuels and so-called alternative fuels. One of the largest
SRI
firms in the world is currently going through an internal exercise by
seriously considering dumping/modifying SRI dogma on nuclear energy--not
because they think it's risk free, but because they are trying to break
through ideological shackles that divides the world into good and bad.
They
are doing what should always be done...risk/risk and cost/benefit
analysis,
instead of using the 19th century SRI litmus tests standards.

I know you're work...it's very nuanced. That's why I was so taken aback
by
the way you posed this question. Why don't you just say:

"Let's discuss what these SRI indices actually measure, how they
identify
firms with different environmental outputs, and then do appropriate
empirical analysis (based on clearly stated assumptions) about the
benefits
and potential negatives of those stock choices (you still have to get
over
the hurdle that buying and selling stocks of companies fall into any
specific category, whether SRI or sin stocks or whatever--has ANY
influence
at all on the stock market---to date, there is absolutely no consistent
evidence that it does).

Jon


On 9/14/06 9:54 AM, "Koehler.Dinah@EPAMAIL.EPA.GOV"
<Koehler.Dinah@EPAMAIL.EPA.GOV> wrote:

> Please Everyone cannot we turn this ongoing debate around a bit:
rather
> than focus on whether an SRI does better/worse financially than
> supposedly non-SRI funds/indexes, let's discuss what good these
> investment approaches are doing for the state of the global
environment.
> By how much has corporate water use been reduced and how much of that
> reduction can be "traced" to the actions of SRI? Same for solid waste
> reduction/pollution prevention, reduction in toxic chemical use...etc.
>
> In many ways it can be likened to a discussion of the effectiveness of
> ISO 14K, how has this strategy contributed to improvements in
> environmental quality and financial performance...
>
> We at EPA are constantly being challenged to show how US environmental
> regulations are contributing to environmental quality and protection
of
> human health without "undermining" the viability of the US economy...
> the SRI community should be held to the same standard.
>
> Dinah Koehler, Sc.D.
> Economics and Decision Sciences Research
> National Center for Environmental Research
> Office of Research & Development
>
> Mail address:
> U.S. Environmental Protection Agency
> 290 Broadway
> Mail Code: 2 OPM-PPEB
> 26th Floor
> New York, NY 10007
> (212) 637-3573
> (202) 343-9687
>
> Courier Delivery Address:
> USEPA, NCER
> Room 3319E Woodies Bldg
> 1025 F Street NW
> Washington, DC 20004-1409

Jon,

Again, from the perspective of someone who is not immersed in the specific
topic but is educated enough to follow the discussion, I think that your
response to Dinah is more interesting and suggestive because it is less
polemical than some of your previous posts. I happen to agree that it is
worthwhile to challenge SRI investment choices as inherently "good" without
tying them to some investment expectations/objectives that can be observed.
Also, I assume that the real issue is "socially responsible" mutual funds
rather than "social responsible" investing per se. If a person is investing
in a socially responsible mutual fund and treating it as if it was a bank
account, perhaps the person does derive some "utility" from the investment
because it fits their "tastes." In that case, it might be better to term
the person a "investor/consumer" rather than a "narcissist" who is looking
for both financial returns and "status/social vanity" returns. (I recognize
that status returns which involve interpersonal comparisons are not really
amenable to this kind of analysis but .... ). If you want to assert that
SRIs don't always perform up to snuff based on concrete measures of
"progressivity," that seems like an interesting debate. The other
interesting question would be what the alternatives to SRIs might be and
whether they work any better.

Best, Bill


>From: Jon Entine <runjonrun@EARTHLINK.NET>
>Reply-To: Organizations and the Natural Environment Discussion
><ONE-L@AOMLISTS.PACE.EDU>
>To: ONE-L@AOMLISTS.PACE.EDU
>Subject: Re: let's change the tune a bit shall we... back to environmental
>outcomes
>Date: Thu, 14 Sep 2006 12:15:01 -0400
>
>Dinah:
>
>Your motivation is great, but even the way you phrase your comment is
>ideologically loaded.
>
>The fact is, it's quite possible--I personally believe likely--that many of
>these SRI "investment approaches" do the very opposite of "doing good for
>the state of the global environment."
>
>You assume SRI is by definition "good" or "progressive". The evidence in
>many areas, from corporate governance, to supply chain analysis, to energy
>suggests that SRI funds are very sloppy and often flat out wrong in
>identifying "doing good."
>
>Consider the risk/risk issues and cost/benefit issues involving nuclear
>energy, fossil fuels and so-called alternative fuels. One of the largest
>SRI
>firms in the world is currently going through an internal exercise by
>seriously considering dumping/modifying SRI dogma on nuclear energy--not
>because they think it's risk free, but because they are trying to break
>through ideological shackles that divides the world into good and bad. They
>are doing what should always be done...risk/risk and cost/benefit analysis,
>instead of using the 19th century SRI litmus tests standards.
>
>I know you're work...it's very nuanced. That's why I was so taken aback by
>the way you posed this question. Why don't you just say:
>
>"Let's discuss what these SRI indices actually measure, how they identify
>firms with different environmental outputs, and then do appropriate
>empirical analysis (based on clearly stated assumptions) about the benefits
>and potential negatives of those stock choices (you still have to get over
>the hurdle that buying and selling stocks of companies fall into any
>specific category, whether SRI or sin stocks or whatever--has ANY influence
>at all on the stock market---to date, there is absolutely no consistent
>evidence that it does).
>
>Jon
>
>
>On 9/14/06 9:54 AM, "Koehler.Dinah@EPAMAIL.EPA.GOV"
><Koehler.Dinah@EPAMAIL.EPA.GOV> wrote:
>
> > Please Everyone cannot we turn this ongoing debate around a bit: rather
> > than focus on whether an SRI does better/worse financially than
> > supposedly non-SRI funds/indexes, let's discuss what good these
> > investment approaches are doing for the state of the global environment.
> > By how much has corporate water use been reduced and how much of that
> > reduction can be "traced" to the actions of SRI? Same for solid waste
> > reduction/pollution prevention, reduction in toxic chemical use...etc.
> >
> > In many ways it can be likened to a discussion of the effectiveness of
> > ISO 14K, how has this strategy contributed to improvements in
> > environmental quality and financial performance...
> >
> > We at EPA are constantly being challenged to show how US environmental
> > regulations are contributing to environmental quality and protection of
> > human health without "undermining" the viability of the US economy...
> > the SRI community should be held to the same standard.
> >
> > Dinah Koehler, Sc.D.
> > Economics and Decision Sciences Research
> > National Center for Environmental Research
> > Office of Research & Development
> >
> > Mail address:
> > U.S. Environmental Protection Agency
> > 290 Broadway
> > Mail Code: 2 OPM-PPEB
> > 26th Floor
> > New York, NY 10007
> > (212) 637-3573
> > (202) 343-9687
> >
> > Courier Delivery Address:
> > USEPA, NCER
> > Room 3319E Woodies Bldg
> > 1025 F Street NW
> > Washington, DC 20004-1409