The Origins of Responsible Investment
In the 1920s religious institutions were early pioneers of responsible investment when they sought to align their views with their investments by excluding from their portfolios companies they regarded as “sin stocks” – those involved in alcohol, tobacco and gambling. Then, in the 1960s, in response to the Vietnam war “peace portfolios” avoided investment in armaments.
The momentum for responsible investing accelerated in the 1970s and 80s, when investors concerned about apartheid in South Africa avoided companies with activities in South Africa and encouraged divestment by these companies. Nelson Mandela refers to the importance of this economic vote as a powerful instrument in removing the apartheid regime.
Wall Street Greens
The 1980s saw environmental concerns reflected in investment trends with the advent of “green” portfolios and a new group of investment professionals known as the “Wall Street Greens”. During the 1990s, responsible investment broadened to integrate the concerns of stakeholders, including community, customers, environment, employees, suppliers and shareholders, within the context of “sustainable development”. It has now become a worldwide phenomenon and has entered the mainstream of investment management.