Socially responsible investing on the rise

The Social Investment Forum has issued a new report showing that assets under management at firms employing socially responsible investment (SRI) screens grew by 18% to $2.71 trillion [subscription required] in the two-year period ended in December of 2006.

That compares to growth of just 3% for total assets under professional management. Public outcry over environmental issues and the crisis in Darfur have led many firms to adopt at least some elements of socially responsible investing.

The Wall Street Journal reports that there were 154 SRI funds in the U.S., managing $159.2 billion in assets as of the end of 2006 vs. 151 funds and $148 billion in assets two years earlier.

SRI sometimes gets a bad rap: some pundits, including Jim Cramer, have argued that it would be better to make money investing in evil companies and then donate some of the proceeds to charity. However, in his book The SRI Advantage, Peter Camejo shows that socially responsible investing has actually historically outperformed traditional investments. Perhaps you really can do well by doing good.

What intrigues me about SRI is that it's gotten several of my socially conscious friends saving/investing for their future when, without the allure of saving the world, they might not have.

To learn more about SRI and research funds, visit SocialFunds.com.