For those of you already familiar with the basics of socially responsible investing, feel free to skip down to the performance table for April and the month's news highlights. If you're just learning about the world of SRI, then you're right where you should be!

Socially responsible investing isn't about whether you sit around with friends and gab about your stock picks. Nor is it about whether you've thought long and hard about each investment decision prior to executing a trade: Of course you've done that! It's also not about whether you file your brokerage statements away in a neat and timely fashion. Each of those things may be deemed "social" or "responsible" -- perhaps even admirable -- but it's not what the investment world means when it talks about SRI.

SRI refers to blending one's financial decision-making with one's perception of its impact on society. Naturally, this notion is jam-packed with personalized value judgments and not without a certain morally infused attitude. Well, so, too, are most of our daily activities. SRI can take various strategic forms. Some investors use screens to avoid what they perceive as "sin" stocks. Others may use their shareholder power to challenge management on current practices.

But you probably already knew all that. After all, the Fool has covered the topic in articles and even argued about it in a Dueling Fools debate on socially responsible investing.

Why should I care?
Here's the scoop, and please don't take it too personally: It really doesn't matter how you feel about SRI. Like it or not, this way of investing has already made its presence known in the press and in the boardroom, on campus and in congregations, through a larger number of tailored securities products, increased shareholder activism, and greater corporate acknowledgment. According to the Social Investment Forum's fifth biennial report on investment trends, which was released in January, SRI investment assets have grown faster since 1995 than all managed assets in this country -- more than 258%. That report documents an 18.5% increase in SRI mutual funds and a 16% rise on social and corporate governance resolutions over the past two calendar years.

On first blush, it's hard to deny the allure of potentially saving the world while also reaping investment returns. But questions and conflicts abound, whether you believe that any inherent rapaciousness of capitalism can or even should be tamed for the greater good, or whether you're simply mesmerized by the slick P.R. brochures portraying a company's integrity.

You can judge for yourself the movement's impact through our monthly reports highlighting performance and interesting developments.

Profiting my portfolio as well as my soul?
Some may say you can't put a price on virtue. Sure you can. Many general indices in this arena use a blend of exclusionary factors to bar companies involved in such businesses as alcohol, tobacco, firearms, gambling, and military contracting, and then further evaluate candidates on issues including product and workplace safety, environmental impact, diversity, and community relations. Here are a few performance yardsticks:

  • The KLD Broad Market Social Index consists of all companies of the Russell 3000 index that meet research firm KLD Research & Analytics' criteria.
  • The Calvert Social Index consists of the 1,000 largest U.S. companies, which are then screened by Calvert, an asset management firm.
  • The Domini 400 Social Index includes about 250 S&P 500 companies, 100 additional companies providing industry representation, and another 50 companies with strong characteristics selected by KLD Research & Analytics. This index, established in May 1990, is the benchmark for measuring the impact of SRI on financial returns because it was the first to subject portfolios to multiple screens.

 For an overall view:                                                   


April Change

YTD Change

Broad market









Russell 3000



Russell 1000



S&P 500



Sources: Bloomberg, Calvert Group, Ltd., KLD Research & Analytics

Neither SRI-inclined investors nor other folks had much to complain about last month. Both SRI and general indices performed solidly, as equity prices marched upward.

To learn more about selecting your own SRI-based portfolio, see "Who's Naughty? Who's Nice?"

So what's been going on?
Last month's developments include:

  • The Investor Environmental Health Network, representing 20 investment groups totaling $22 billion in assets, published the "Fiduciary Guide to Toxic Chemical Risk" against a backdrop of rising shareholder resolutions dealing with toxic product risks, including ones introduced this proxy season concerning Apple (NASDAQ:AAPL), CVS (NYSE:CVS), Dow Chemical (NYSE:DOW), DuPont (NYSE:DD), Sears (NASDAQ:SHLD), and ServiceMaster (NYSE:SVM).  
  • Dell (NASDAQ:DELL) announced that it will reduce paper usage by offering a new way for shareholders to enroll in electronic delivery of financial reports.
  • The United Nations Committee on the Elimination of Racial Discrimination told Canada that it must rein in corporations such as Barrick Gold (NYSE:ABX) operating on Indian land in the U.S.
  • The New York City comptroller asked the SEC and the U.S. Attorney General's Office to investigate Wal-Mart (NYSE:WMT) for alleged illegal surveillance operations directed toward shareholders who submitted proxy petitions. The Interfaith Center on Corporate Responsibility also called on the company to apologize to those whose privacy may have been compromised and to focus on matters of corporate responsibility brought to the company's attention.
  • Circuit City (NYSE:CC) was sued by three laid-off employees alleging age discrimination.
  • ConocoPhillips (NYSE:COP) joined the U.S. Climate Action Partnership and announced support for a mandatory national framework to address greenhouse gas emissions.  
  • Google (NASDAQ:GOOG), in partnership with the U.S. Holocaust Memorial Museum, updated its satellite mapping service to show images of burned villages, refugee camps, and wounded children in Sudan in order to raise public awareness.
  • McDonald's (NYSE:MCD) agreed to allow the formation of more unions in its 750 outlets in China. The company separately agreed to pay a penny per pound more to Florida field laborers who pick the company's tomatoes in a deal brokered by former President Jimmy Carter, and continues to work toward developing a national code of conduct for its produce pickers.  
  • Amnesty International USA called for an investigation of Dow Chemical by the SEC regarding letters purportedly showing that the company's management is concerned about its ability to expand in India and is secretly pressuring the Indian government to rid the company of legal liabilities associated with the Bhopal toxic chemical disaster. The human rights group also staged a rally asking JPMorgan Chase (NYSE:JPM), a major Dow Chemical investor, to raise the issue of ongoing human rights violations in Bhopal with the chemical company. Dow responded to Amnesty's allegations by issuing a statement that it stands by its SEC disclosures regarding Bhopal.
  • FedEx (NYSE:FDX) reached a $54.9 million settlement with thousands of African-American and Latino employees who accused the company of unfair employment practices. The company agreed to change its promotion, evaluation, and discipline practices including elimination of a promotional test that included a reading component.
  • Home Depot (NYSE:HD) launched its Eco Options program, a labeling system enabling customers to easily identify environmentally friendly products.
  • Wal-Mart launched the Live Better Index, a barometer of consumer attitudes and shopping behaviors which tracks customer purchases of five products: compact fluorescent bulbs, organic milk, concentrated/reduced-packaging liquid laundry detergents, extended-life paper products, and organic baby food.
  • Shareholders of Coca-Cola (NYSE:KO) rejected proposals calling for a study of water usage in India, annual publication of product testing results, and limits on executive compensation.
  • A Chinese political prisoner sued Yahoo! (NASDAQ:YHOO) for allegedly abetting the commission of torture by helping Chinese authorities identify political dissidents.
  • Community leaders and shareholders urged Newmont Mining (NYSE:NEM) to address human rights and environmental concerns in its operations and investments. Separately, an Indonesian court found the company and one of its executives not guilty of polluting a bay with toxins from a now retired gold mine
  • Ford (NYSE:F) named an executive to a new post as senior vice president for sustainability, environment, and safety engineering, marking the first time a Detroit automaker has used "sustainability" in a job title.
  • Morgan Stanley (NYSE:MS) reached a gender class action settlement valued at more than $70 million and including efforts aimed at rectifying gender inequality in the distribution of accounts and other business opportunities.
  • Bristol-Myers Squibb (NYSE:BMY) and Vancouver company Vancity Group received the sixth annual top awards for sustainability reporting from Ceres, a coalition of environmental, investor, and advocacy groups, and the Association of Chartered Certified Accountants.
  • Ecuador's president criticized Chevron (NYSE:CVX) and lent support to 30,000 Amazon Indians and settlers who are suing the company for allegedly failing to clean up billions of gallons of toxic wastewater.
  • At the annual shareholder meeting of Abbott Labs (NYSE:ABT), CEO Miles White defended the company's decision in February to withhold seven drugs including its HIV medication, Kaletra, to protest the Thai government's move to break the drug's patent.
  • PepsiCo (NYSE:PEP) announced the purchase of renewable-energy certificates in the largest such sale to date, matching the purchased electricity used by all its U.S.-based facilities and becoming the EPA's top green power purchaser.
  • The U.S. House of Representatives passed a bill giving shareholders a greater voice in setting executive compensation.

What others are saying
The following are among the more interesting articles published on topics of corporate responsibility last month:

  • Fortune published "Warren Buffett and Darfur," discussing the Sudan divestment movement and Berkshire Hathaway (NYSE:BRK-A).
  • The Miami Herald published "Colombia's Protection Payment Scandals," reporting on American companies scrutinized for payoffs to terrorists.
  • The New York Times published "Certifying Coffee Aids Farmers and Forests in Chiapas," describing the ramifications of coffee certification programs for small-scale coffee producers.
  • The United Nations Global Compact published its Compact Quarterly, highlighting the debate between investment and divestment approaches for addressing desired business changes.

Social-responsibility reports
These voluntary documents, often called sustainability or citizenship reports, have become increasingly popular. According to the Social Investment Analysts Research Network, about 40% of the S&P 100 Index now submit reports that document a company's progress on such topics as environmental and labor practices, human rights, philanthropy, and product responsibility. The documents can usually be found on the issuing company's website.

Last month, companies issuing reports included Aracruz Celulose (NYSE:ARA), BAE Systems, Ericsson (NASDAQ:ERIC), Kimberly-Clark (NYSE:KMB), Legal & General, Nokia (NYSE:NOK), Safeway (NYSE:SWY), Talisman Energy (NYSE:TLM), and Wells Fargo (NYSE:WFC).

For a more detailed examination of sustainability reports, see:

Anything more to say?
Join the Fool's Socially Responsible Investing discussion board to weigh in with your views on the topic, and keep reading the Fool to stay on top of events.

Fool contributor S.J. Caplan is often social, if not always responsible. She completed the World Bank Institute's course on corporate social responsibility and owns shares of Google. Dell is a Stock Advisor and Inside Value pick. ServiceMaster and JPMorgan Chase are Income Investor recommendations. Wal-Mart, Coca-Cola, Berkshire Hathaway, and Home Depot are Inside Value picks. FedEx and Yahoo! are Stock Advisor recommendations. Try any of our newsletters free for 30 days. The Motley Fool's disclosure policy is socially responsible.