The latest issue of Fortune has a pretty good update on SRI mutual funds. The toughest criticism the industry has seen in recent years is that funds are not green enough, and that even though Best Buy, Outback Steakhouses, and Hershey pass the screens, what's truly responsible about them?
Glad you asked, at least about Hershey. Hershey's controlling shareholder is the Milton Hershey School for disadvantaged kids, which is one of the worthiest causes I can think of. Age and decrepitude have forced me to curtail my candy bar consumption, but when I indulge I make sure it's a Hershey product.
The larger point is well-taken, however. SRI so far has been more about avoiding/boycotting bad companies than aggressively looking for great ones. Give credit to KLD and Barclays, who are today introducing an exchange-traded fund that weights companies, in part, according to their social scores and virtually abandons the old exclusion approach. The product, which is then optimized to the Russell 1000, will be a interesting test of whether social screens can, in and of themselves, add value.