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SRI is becoming mainstream

By Steven Miyao

The investment community is starting to get on board with SRI. Last week, an agreement was reached in the California state legislature that imposes the most sweeping controls on carbon dioxide emissions in the the country. It has been strongly supported by many venture capitalists from Silicon Valley. They are saying the measure will create new industries and new jobs. This is why SRI is becoming mainstream. SRI is going to make some people a lot of money.

There are only about 5 out of 3000 hedge funds that have a SRI investment philosphy. Hedge funds are a necessary component to further influence companies' social conscience. Only when companies' stocks are going to get shorted will firms really feel the pressure. SRI investing will be one of the major drivers in changing our business culture.

Business Week recently showcased the trend towards green investing. It's worth a read, but here's a paragraph that sums it up.

You know a cultural movement is real when the money men get on board. In just the past year a broad swath of financiers -- venture capitalists, hedge funds, investment banks, public pension funds, and even stodgy insurers -- have begun sinking billions of dollars into producers of ethanol, fuel cell superbatteries, microscopic bugs that turn glucose into plastic, environmentally friendly pesticides, anything that might tap into the green craze. Saving the planet, protecting America, doing God's work, cynically exploiting a feel-good trend -- call it what you will. Wall Street sees money to be made. When John V. Veech, a managing director at Lehman Brothers Inc. (LEH ), showed up at a renewable energy conference in June, he was amazed to see that it was standing room only. "If you went five years ago you'd see a lot of ponytails," he says. "Now these conferences are packed with suits."