Calvert Investments a SRI Fund Company’s Success Story

SUSIE GHARIB: Calvert Investments is one of the largest SRI fund
companies. I recently spoke with its CEO Barbara Krumsiek and began by
asking her what test a company has to pass in order to qualify as a
socially responsible investment.

different areas that we look at – the environmental, environmental
practices of the company, diversity practices, broadly speaking workplace
practices, human rights policies at overseas operations, indigenous
peoples’ rights, governance and community activities. There’s a whole range
of analysis that together form a profile of a company from a corporate
social responsibility viewpoint.

GHARIB: Is it fair to say that if Calvert’s not investing in a
company then it is socially irresponsible?

KRUMSIEK: We don’t like to look at it that way because we think every
company has the potential to be a socially responsible company. In fact,
one of our strategies is called SAGE, sustainable achieved through greater
engagement. And in that strategy we will own almost any company but we
will dialogue, we will communicate with the company and let them know where
we think they could do better. So I think there’s hope that every company
can have a very strong environmental social governance profile.

GHARIB: So I understand that Calvert has been an advocate. It
petitions and lobbies companies, encouraging them to make positive change.
How successful have you been of that?

KRUMSIEK: I have one example and it’s Dell (NASDAQ:DELL). Going on
about seven or eight years ago we worked very closely with Dell
(NASDAQ:DELL). At that time there were no take-back programs by computer
manufacturers or distributors for used waste, the waste in the computer
area. And as you can imagine that creates environmental issues in those
countries where those waste products are disposed of. And after some
negotiation, Dell (NASDAQ:DELL) to their credit agreed to initiate the
first take back program for computer waste.

GHARIB: As you know Barbara, over the last decade, there has been
huge growth in funds specializing in socially responsible investing. Has
this made a difference in corporate behavior? In other words, are we
finding — to what extent are companies becoming, putting more emphasis on
social responsibility and corporate responsibility?

KRUMSIEK: I think there’s been a huge up tick. Ten years ago 800
companies produced sustainability reports. It’s been reported this past
year 5,500 companies have produced sustainability reports and this provides
data to investors and obviously consumers interesting in knowing how
companies operate and what kind of environmental footprint they leave and
what kind of governance and social practices they support. So I’d say
there’s been a huge up tick.

GHARIB: I’m sure you hear this comment quite a bit. A lot of
investors want to do the right thing and put their money in socially
responsible funds, but they’re afraid they’re not going to make as much a
return as they would on a mainstream fund. What do you say to them?

KRUMSIEK: What we say is that we believe our funds should achieve at
or above benchmark averages over the long run. Over shorter periods of
time there may be differences in patterns of return. For example, we tend
to overweight the technology sector relative to other sectors in our work
and that could lead to some changes in pattern. However if you look over
the last three years, the annual return to the Calvert social index is
about 20.7 percent versus 19.4 percent for the S&P 500. So we do believe a
competitive firm can be achieved through sustainable and responsible

GHARIB: Very interesting information. Barbara, thank you so much
for coming on the program.

KRUMSIEK: Thank you, Susie.

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