A coalition of research organizations is working to provide investors greater access to worldwide social investment research products and services.
Research organizations from North America and Europe have banded together to promote the globalization of social investing. The Sustainable Investment Research International (SiRi) Group, incorporated in June in The Netherlands, is now ready to formally take on clients. SiRi Group will provide social investors with one-stop shopping for domestic and international corporate social research products and services.
Each SiRi member provides coverage for its national market. The members include AReSE SA of France, Avanzi, s.r.l. of Italy, CaringCompany AB of Sweden, Centre Info SA of Switzerland, Fundacion Ecologia y Desarrollo of Spain, KLD, Inc., of the U.S., Michael Jantzi Research Associates of Canada, Pensions & Investment Research Consultants Ltd. of the U.K., SCORIS GmbH i.G. of Germany, and Triodos Research BV of The Netherlands.
"The formation and development of the SiRi Group is being driven both by the increasing acceptance of SRI (socially responsible investing) globally and by the globalization of the investment process in general," said KLD’s Director of Research, Steven D. Lydenberg. "A network of related but locally based research groups can provide valuable assistance in struggling with the complicated social and environmental issues that social investing inevitably entails," he added
The issues are complicated indeed. SiRi Group’s name incorporates "sustainability," the concept most widely applied in Europe, while descriptions in SiRi Group’s literature and website use "social investing," the concept better known in North America. This is because SiRi has adopted a broad definition of sustainability, one that includes not only environmental issues but also areas of concern to employees, communities, customers and even stockholders.
Harmonization of the concepts and their corresponding criteria would allow for direct comparisons of companies around the world. SiRi Group recognizes this and has created a template for the harmonized profiling of companies. It is already using this template to create profiles of the 500 largest-cap companies in the world. In Europe, the profiles of approximately 200 companies should be completed by March, and approximately 100 U.K. companies, 100 U.S. companies and 35 Canadian companies should be profiled by August.
These harmonized profiles alone, however, cannot provide the whole picture of company’s performance. "SIRI recognizes that a complete understanding of a corporation’s efforts on social responsibility and sustainable practices can only be fully understood within the local cultural and regulatory contexts," said KLD’s Lydenberg. "Through its members, SiRi will provide the interpretive perspectives necessary to supplement and analyze the information in the harmonized profiles."
SiRi endorses and supports the Global Reporting Initiative (GRI), a movement to establish global standards for reporting corporate environmental and social practices. SiRi sees one of its purposes as using local coverage to supplement and help interpret the data that will be provided in GRI reports in the future.
The first major product to be introduced by SiRi as a whole will be a series of socially screened stock indices called the Humanix Indices. CaringCompany, SiRi’s member from Sweden, is playing a primary role in developing the index series. Social investors should look for a launch some time in the first quarter of this year.
Money managers in Europe and North America now have a single research source for companies located on both sides of the Atlantic. SiRi Group plans to continue expanding, and is already actively seeking appropriate members for the Asia-Pacific market. If these developments are any indication of things to come, 2001 will see unprecedented growth in the globalization of socially responsible investing.