Mid-fall brings the social investment industry’s annual convention: SRI in the Rockies (SRIIR). This year’s event runs October 25-29. I thought it might be interesting to offer readers of this blog a little insight into what we are doing and what we hearing at one of the most important annual events in social investment industry.

This convention, as its name implies, traditionally takes place in resorts located throughout the Rocky Mountains. However, as interest in socially responsible investing has grown, the event has been challenged to find Rockies-based locations that can host the gathering. This has lead to a “stretching” of the Rockies moniker. This year’s convention is taking place in Whistler, British Columbia, Canada (2010 host city for the Winter Olympics)–only the second time this event has been held outside the United States. (Next year the convention will be held in Tucson, Arizona–perhaps the “speed bumps to the Rockies?”) SRIIR 2009 will draw nearly 700 financial planners, mutual fund companies, community investment organizations, institutional investors, activist organizations, and (increasingly) corporate representatives. The convention is organized by the US Social Investment Forum (www.socialinvest.org) and First Affirmative Financial Network (www.firstaffirmative.com), the nation’s largest network of SRI-focused financial advisors.

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Some of you may have heard about two new interpretive bulletins issued by the Department of Labor, championed by the US Chamber of Commerce, offering clarification on the use of supposed “non-economic factors” in the investment of pension funds governed by Employee Retirement Income Security Act (ERISA) regulations. Various elements of the media have suggested that this is a “thumbs down” to the use of Socially Responsible Investing (SRI) investment criteria. This is matter of some disagreement. Here is a link to the story.

I think that the current economic crisis underscores the reality that environmental, social and governance (ESG) factors clearly are indeed (in many cases) “economic factors.” So I’m not sure the claims of these media stories is particularly accurate. Had dutiful, “fiduciary” trustees - particularly in long-term focused ERISA plans - looked beyond Wall Street dogma to consider the economic implications of certain “social” (dare I say “moral”) factors at work in the markets, we very well might not be having this conversation. In fact, we may well be coming close to the day when a REFUSAL to look at the potential economic implication of ESG issues may be deemed a BREACH of fiduciary duty.

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Many of the depressing reports on the health of the American economy reference that 60% of our economy is driven by consumer spending. After years of stagnant middle- and lower-income wages, ballooning consumer debt, dramatic home-equity borrowing, the sub-prime mortgage crisis, skyrocketing gas prices and the collapse of home values, one wonders just what consumer has money left to spend?

With $1.2 trillion in equity and housing value destroyed in the first quarter of 2008, consumer spending—for luxuries and, increasingly, necessities—is being carried by revolving credit usage, which increased four-fold in recent months over the growth rate of 2004-2006. At the same time, banks reeling from stunning losses in the sub-prime mortgage collapse are squeezing many of these same sub-prime borrowers through ever more restrictive credit card policies. While generating significant short-term returns for the credit card company, these practices push borrowers ever closer to financial collapse—further weakening the economy as a whole.

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