Evolution of Responsible Investing
Socially responsible investing in the United States dates back to the 18th century, but now encompasses $8.4 trillion in stocks, bonds, mutual funds and ETFs and community and impact investing.
The Future Can Be Bright
Socially responsible investing in the United States dates back to the 18th century, but now encompasses $8.4 trillion in stocks, bonds, mutual funds and ETFs and community and impact investing.
Socially responsible investing in the United States dates back to the 18th century when Methodists resisted investments in companies involved with the slave trade, smuggling, liquor, tobacco, or gambling. Later the Quakers forbade investments in slavery and war, and by 1928, the first socially responsible fund called the Pioneer Fund had similar restrictions.
By the 1960s, Vietnam War protesters demanded that university endowments divest from defense contractors, and in the 1980s, a broad movement developed to demand divestment from companies doing business with the apartheid regime in South Africa. Due in part to this movement, apartheid was officially abolished in 1991 and Nelson Mandela was elected president in 1994.
In 1990, Amy Domini launched the first socially responsible index fund, the Domini 400 Social Index, now called the MSCI KLD 400. Today there are literally thousands of socially responsible mutual funds and exchange-traded funds, as well as opportunities for community and impact investing.
In 2004, the term ESG first made an appearance in a United Nations Global Compact report called "Who Cares Wins." The report, endorsed by 23 financial institutions, explained how capital market stakeholders could integrate environmental, social, and governance factors into investment decisions.
Responsible investing now encompasses stocks, mutual funds and ETFs, community and impact investing, and more. Sustainable investing performs as well or better than conventional investing, and has grown to $8.4 trillion, or 1 in 8 dollars under management.
Read more about the history of ESG here. Read more about the history of impact investing here.
How does responsible investing work in practice? Learn about ESG investing, screening, and more.
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