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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In partnership with five other institutions, MMA Community Development Investments recently helped launch The Isaiah Funds, an interfaith effort to rebuild communities following natural disasters. The funds will provide low-cost capital to disadvantaged communities who are especially hard hit, with an initial focus on hurricane recovery efforts along the Gulf Coast.

Economic redevelopment is a vital, and often overlooked, second stage to disaster recovery. MMA Community Development Investments (MMA CDI) plans to invest up to $500,000 in the funds by 2009. Approximately 85% (over $10 million) of MMA CDI assets come from the MMA Praxis Mutual Funds as part of the Fund’s commitment to community development investing.

Other partners in The Isaiah Funds include: American Baptist Home Mission Society, CHRISTUS Health, Highland Good Steward Management, Jesuits New Orleans Province, and Jewish Funds for Justice.

Though much of the Gulf Coast has regained the appearance of normalcy, some of the hardest rebuilding work lies ahead. The Isaiah Funds anticipate making more than $10 million in investments in New Orleans and the Gulf Coast Region by the end of 2009. Visit isaiahfunds.org to learn more.

A new report from the UN’s Principles for Responsible Investment (PRI) initiative, supported by MMA, highlights significant progress in gaining global commitments to integrate social and environmental values with investment decisions.

The initiative, a collaboration of the United Nations Environment Programme Finance Initiative, the UN Global Compact and institutional investors, recognizes that long-term business success is linked to society’s interests and needs. Released last week, the report showed that the number of investors which have committed to the principles has doubled to over 380 in the past year, representing more than $14 trillion.

MMA has signed the principles and contributed data that was used to develop the report. MMA is one of a few faith-based investor signatories in the U.S. As a shareholder in many corporations, MMA is committed to communicating its concerns with the corporations’ management about financial and social issues.

MMA Praxis Mutual Funds joined Boston Common Asset Management and other concerned investors in filing a shareholder resolution with ConocoPhillips seeking a report on the Company’s policies, procedures and practices for obtaining consent of Indigenous Peoples affected by exploration and development activities. The majority of untapped oil reserves lie in ecologically sensitive and politically unstable parts of the world. It is increasingly important that companies develop sophisticated processes for engaging Indigenous Peoples whose lives are dramatically transformed and disrupted by massive natural resource extraction projects. Failure to do so generates anger, disenfranchisement and active—even violent—resistance. This has cost energy companies billions of dollars, damage to property and loss of human life in countries like Nigeria, Indonesia, Ecuador, Columbia and elsewhere.

Shareholders raised these concerns related to ConocoPhillips plans to explore and develop resources within the remote Northern Peruvian Amazon—a region where a number of indigenous peoples are seeking to live in Voluntary Isolation from the modern world, preserving their ancient ways of life. Efforts by ConocoPhillips and its partner Repsol, pose very real threats to the economic, spiritual, cultural and physical health of these isolated peoples.

The resolution appeared on the Company’s ballot at its May 14, 2008, annual meeting and earned a 9% positive vote, down slightly but sufficient for refiling a third year. The number not voting with management (“yes” + abstentions) actually rose to 24%.

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A recent report from the Social Investment Forum has confirmed what some of us have known intuitively—that many of those who fell victim to the abusive and often predatory practices of the sub-prime mortgage industry would have been better served by the services offered by community development financial institutions (CDFIs). These community banks, community development credit unions and nonprofit loans funds work with low-income or credit-challenged (i.e. “sub-prime”) clients through lending programs designed to help them succeed over the long term, not take advantage of difficult situations. They do this by providing borrower education, emergency assistance programs, fair lending policies and discipline in knowing when—and when NOT—to lend.

The Center for Responsible Lending predicts that 2.2 million borrowers could lose homes with an attendant loss of $164 billion in wealth in 2008. While some sub-prime loans were made to real estate speculators, the demographic hardest hit by predatory lending in the sub-prime market includes racial and ethnic minorities, the elderly, women and low and moderate income borrowers. The Center reports that 53% of African-Americans and 42% of Latino families who bought homes in 2006 have already lost or will lose their homes to foreclosure in the next few years vs. 22% of white borrowers.

CDFIs across the country are rescuing families hurt by predatory practices in the sub-prime mortgage industry through targeted outreach to borrowers, financial counseling, restructuring consumer debt, modifying loans for distressed borrowers, granting short-term loans and managing repossessed properties. MMA is supporting these solutions to the sub-prime crisis through investments in CDFIs held by MMA Community Development Investments (MMA CDI). Currently, MMA CDI has over $5.6 million invested in institutions helping sub-prime borrowers “do the right thing” and build a better tomorrow for their families and communities. You can read the full report on the Social Investment forum website (www.socialinvest.org) and learn more about MMA CDI through the MMA website (www.mma-online.org) .

MMA Praxis applauds the decision by the Securities and Exchange Commission (SEC) not to pursue its controversial process to curtail or even eliminate the right to file shareholder resolutions, proposed in the middle of 2007. SRI and related organizations, including MMA, helped to organize many of the record 34,000 comments the SEC received in opposition to limiting shareowner proposals and the stifling of shareholder speech. However, the Commission has left the door open to revisit such changes in 2008. Thus, MMA will remain vigilant in safeguarding the rights of American investors.

With only a tiny handful of comments on the public record supporting the controversial proposals, the overwhelming expression of opposition paralleled national opinion survey findings released in September. That scientific survey found that only about a third or less of U.S. investors supported any of the five potential approaches outlined by the SEC to curb the rights of shareholders to file shareholder resolutions and participate in the process of selecting members of corporate boards.

This was not the first time that socially responsible and religious investors have challenged a potential SEC curb on the voice of shareholders. The current campaign by concerned investors surpassed by a significant margin the outcry that ensued in 1997-1998 when more than 300 socially responsible investing, religious, labor and other groups coalesced to oppose an earlier SEC staff plan to gut the shareholder resolution process. The groups prevailed in that fight in which the SEC was forced to withdraw its widely-criticized proposal.

Nonprofit endowments, invested primarily in the stock market, provide charitable foundations with financial returns that they use to pursue philanthropic missions. However, foundations don’t necessarily align their asset management with their charitable activities. In early January, the Los Angeles Times published an investigative report detailing perceived contradictions between the mission and the investments of the Bill and Melinda Gates Foundation, the world’s largest. This series of articles ignited a heated debate about socially responsible investing (SRI) in the area of endowments that has continued for months.

In response, the SRI industry has stepped up its focus to demonstrate the opportunities available to foundations in aligning their mission and investments. The Social Investment Forum, the social investment industry’s trade association, has published a booklet on the subject titled: The Mission in the Marketplace: How Responsible Investing Can Strengthen the Fiduciary Oversight of Foundation Endowments and Enhance Philanthropic Missions. MMA and the MMA Praxis Mutual Funds have been active in lifting up this conversation, particularly among faith-based charities and institutions. We believe that there doesn’t have to be a wall between the investments and mission of foundations. The following is a piece I wrote titled A Third Way for the Gates Foundation.