Socially responsible investment (SRI) assets grew faster than the entire universe of managed assets in the United States during the last 10 years, according to the Social Investment Forum's fifth biennial report on SRI trends. Total socially responsible investment assets rose more than 258 percent from $639 billion in 1995 to $2.29 trillion in 2005, while the broader universe of assets under professional management increased less than 249 percent from $7 trillion to $24.4 trillion over the same period.

According to the Forum report, the $2.29 trillion in total assets under management using one or more of the three core socially responsible investing strategies - screening, shareholder advocacy, and community investing - is up from a total of $2.16 trillion in 2003. Among the signs of an ongoing growth from 2003 to 2005 in socially responsible investing are the following: an 18.5 percent increase in assets invested in SRI mutual funds; a 16 percent jump in social and corporate governance shareholder resolutions (and significantly higher levels of support for such proxy measures); and a 40 percent boost in funds invested in community investing.

Tim Smith, president of the Social Investment Forum and senior vice-president at Walden Asset Management, said:  Over the past decade, SRI has become a major force in the U.S. financial marketplace. Socially and environmentally screened mutual funds have experienced substantial growth in their number and diversity of products as well as the social issues they consider. Mainstream money managers are increasingly incorporating social, environmental and governance factors into their investing. A growing number of institutional investors are embracing the philosophy of active ownership with the companies in their portfolios. There has been real growth in the number of shareholder resolutions filed on social, environmental and corporate-governance issues and support for them rose dramatically over the last ten years. And community investing is surging at a meteoric rate as an option for investors who want to see their assets make a direct and tangible difference in the U.S. and around the world.

Alisa Gravitz, vice president of the Social Investment Forum and executive director, Co-op America, said :  It' s clear that the combination of competitive performance, screening, and advocacy on behalf of their investors offered by SRI mutual funds are making them an increasingly attractive option for a wide-range of investors. SRI mutual funds have grown from $12 billion in 1995 to $178.7 billion in 2005, far outpacing the overall growth of mutual funds in the US. More and more investors are turning to SRI mutual funds because they protect investors' needs better than the conventional industry: providing competitive returns, protecting them from unethical and irresponsible corporate conduct, and mobilizing their investments for a better future .

Jean Pogge , the Social Investment Forum's Community Investing Program vice chair and senior vice president of Mission-Based Deposits for ShoreBank in Chicago, said:  Community investing experienced tremendous growth from 2003 to 2005. In total, community investing expanded by two-fifths over the period. And assets in community investing expanded even more dramatically over the past 10 years. In 1995, community investing assets totaled $4 billion, and have since grown almost 400 percent to the $19.6 billion found in this report. This growth in assets is increasing economic opportunities for lower-income communities and spurring industry developments that are making it easier for a broad range of investors to participate in this expanding field."

Other highlights of the report included the following:

• Nearly one out of every ten dollars under professional management in the United States today is involved in socially responsible investing. The $2.29 trillion in SRI identified in 2005 reflects 9.4 percent of the $24.4 trillion in total assets under professional management tracked in Nelson Information' s Directory of Investment Managers.
• Assets in socially screened mutual funds and other pooled products rose to $179 billion in 2005, an 18.5 percent increase over the $151 billion tracked in 2003. Over the same period, the number of mutual funds and pooled products tracked edged up from 200 to 201. In 1995, $12 billion in assets were found in socially screened funds.
• Socially and environmentally screened mutual funds have experienced substantial growth in the number and diversity of products and screens offered.
• With more than $1.5 trillion in assets, socially screened separate accounts managed for individual and institutional clients constituted the bulk of SRI assets tracked in 2005, including $17.3 billion managed for individual clients and another $1.49 trillion under management in institutional client accounts. SRI separate account assets have increased 10-fold from the $150 billion identified in 1995.
• Mainstream money managers are increasingly incorporating social and environmental factors into their investing.
• Shareholder resolutions on social and environmental issues increased more than 16 percent from 299 proposals in 2003 to 348 in 2005. Social resolutions reaching a vote rose more than 22 percent, from 145 in 2003 to 177 in 2005. Institutional investors that filed or co-filed resolutions on social or environmental issues controlled $703 billion in assets in 2005, a 57-percent rise over the $448 billion in assets counted in 2003.
• Assets in community investing institutions rose 40 percent from $14 billion in 2003 to $20 billion in 2005. Community investing assets have nearly quintupled from the $4 billion identified a decade ago.