Nearly one out of every eight dollars professionally managed in the U.S. is involved in sustainable and responsible investing, according to the US SIF Foundation's 2010 report on socially responsible investing trends in the U.S. Some type of social criteria is integrated into about 10% of global assets, says Kurtz.
John Nofsinger, a finance professor at Washington State University, doesn't know if his former students who went into financial advising apply the SRI and corporate responsibility lessons he shared in class, but he hopes they do. "A lot of people put their money where their mouth is, where their beliefs are. Having expertise in-house could be valuable," he says. But you don't necessarily need socially responsible clients. "Any knowledge about that can be implemented in any kind of portfolio," he says.
For the past five years, Nofsinger has integrated these topics into the courses he teaches at the undergraduate, MBA and doctoral levels, and he says students have become more interested since the financial crisis. He's also talked to them about the objectives of different funds and introduced them to indexes in this space.
Nofsinger expects to spread comprehensive, unbiased information to more students, professors and industry professionals through a new book he co-edited, Socially Responsible Financing and Investment, to be published this fall. It includes chapters written by a wide variety of academics, practitioners and crossovers, including Kurtz. Nofsinger hopes the discussion questions at the end of each chapter generate additional dialogue.
Nearly all of the world's 250 largest companies (95%) are reporting their corporate responsibility efforts, according to a survey conducted last year by KPMG. Yet MBA students who arrive on campus from the financial services industry often haven't been exposed to the idea of corporate social responsibility before, says Kellie McElhaney, an adjunct assistant professor at Haas and the faculty director of its Center for Responsible Business. "Those from wealth management or retail banking can come in like deer in headlights," she says.
McElhaney, who teaches strategic corporate social responsibility and advises Global 1000 companies, says her students generally go on to work in other fields. But she thinks exposure to the ideas could be helpful for those pursuing careers in the wealth space. First, students are learning about how companies can protect and create value. They're also seeing how sustainability can offer growth opportunities, which can be built into portfolios.
Sustainability is a big focus at the University of North Carolina's Kenan-Flagler Business School. Sustainable enterprise is integrated into virtually all the core MBA classes students take in their first year, including finance, where the students learn the theory and practice of responsible financial management. Sustainable enterprise is also taught in many elective courses on things like real estate and alternative investments.
Carol Seagle, an assistant professor of strategy and entrepreneurship at Kenan-Flagler and director of research for its Center for Sustainable Enterprise, believes that students who learn about sustainability in business school curriculums will boast a competitive advantage.
"It's a new lens, a new way of asking questions and coming up with ideas," she says. Students are learning about such things as supply chains, market expansion, risk assessment and management, cost reduction, revenue enhancement and brand building-all of which affect the value of what we invest in, she says.
David Wood, the director of the Initiative for Responsible Investment (IRI) at the Hauser Center for Nonprofit Organizations at Harvard University, sees big benefits from teaching responsible investing. "It gives students a better sense of how to take an implicit idea, see that it's an interesting topic and put some meat on the bones," he says. They may learn how to anticipate client demand and how to service that demand.