Bradford Plumer's article is excellent, but oddly framed. "Is socially responsible investing a sham?" the headline asks. Obviously not. The article points out its important role and the only slightly less obvious fact that corporations are apt to employ greenwashing and sundry other PR strategies to improve their image while hewing closely to behavior that protects their perceived financial interests. The complexity of corporate accountability, however, like the complexity of fighting violent crime and the propensity of politically sensitive bureaucracies to massage the numbers, hardly proves that reform is unnecessary or that steps undertaken in its name are necessarily worthless. Of course you have to look at the details. That's what investors are supposed to do anyway.
Plumer adds that because of the limits of SRI, government regulation remains important. This is always a valuable point to make in our rather carelessly market-hyping media culture. But pressure can play an unpredictable role and can affect the bottom line. Wal-Mart seems to be undergoing tough times, for instance (see wakeupwalmart.com), in part by way of activist media efforts that seem to have reached a critical mass. Meanwhile, NPR's Weekend Edition Saturday reported that the Gates Foundation has undertaken an internal review of its investment practices in response to the LA Times story. Of course we don't know what changes, if any, will result. But in the age of the Internet and of globalizing consumer, labor, and environmental activism, SRI should not be undersold or thought of as a sham. It's a potentially powerful tool that needs to be used with care.
