|
 What
is Social Screening?
Screening
your portfolio means scanning an
investment universe based on
social criteria. Companies whose
policies run counter to your
concerns are avoided, and/or
those with exemplary conduct are
emphasized. This decreases the
number of potential investors in
problematic companies while
increasing the number of
investors in responsible
companies. This could,
potentially, affect their cost of
capital and discourage or
encourage respectively, their
operations. Social Investing
aligns an investor's
investment policy with their
values and beliefs.
We can evaluate a portfolio
according to any combination of
social screens. Some common
screens are listed
below:
Avoidance
Screens
-
Companies with significant
problems in the following areas
are often avoided:
|
Environment
|
Alcohol
|
|
Nuclear
Power
|
Tobacco
|
|
Weapons
|
Gambling
|
|
Product/Services
Quality
|
Gay
and Lesbian
Rights
|
|
Employee
Relations
|
Repressive
Regimes
|
|
Equal
Opportunities
|
Animal
Rights
|
Supportive
Screens
- Companies showing exceptional
commitment in the following areas
are often sought out:
|
Environment
|
Equal
Opportunities
|
|
Product/Services
Quality
|
Animal
Rights
|
|
Alternative Energy
|
Organic
Agriculture
|
|
Community
Relations
|
Gay
and Lesbian
Rights
|
|
Employee
Relations
|
Personal
Empowerment
|
Financial
Impact of Social Screening
Many
social concerns have financial
impacts. For example:
Cost-Price
Integration - The true
cost of some products is not
fully reflected in the price.
Shareholders profit while the
public absorbs the external costs
(e.g. Tobacco health costs).
Increasingly, the regulatory
process forces companies to
bear these costs.
Hidden
Liabilities - Companies may
experience unexpected charges due
to lawsuits, fines,
boycotts and
settlements.
Human
Capital- Investment in human
capital returns increased
productivity and loyalty, while
avoiding costly litigation or
strikes.
Management-
Positive performance on social
evaluations is often indicative
of quality management and
foresight.
Such
factors provide an additional
level of company analysis and
complement traditional
fundamental analysis. Social
investing, by recognizing
non-quantifiable factors that can
affect financial performance, may
improve financial return over the
long term.
Social
Research Services
The
Progressive Asset Management
Network maintains a fully staffed
social research service dedicated
to providing the best, most
complete social research for our
clients as possible. We also make
this service available on a
service fee basis to those that
are satisfied with their current
investment managers, but who need
a social research component to
their portfolios. We can work
with your present investment
managers to screen your portfolio
on the social issues you care
most about.
The first step is to
contact
us
to start the
conversation.
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