Steve Schueth, president of First Affirmative Financial Network LLC, says it's absolutely accepted. "Light green or SRI light isn't necessarily bad as long as clients understand what they're getting into," he says. This requires having realistic expectations from the start, ongoing communication, and funds that stay true to their defined methodology.

Both Schueth and Patricia Daly, a Dominican Sister of Caldwell, N.J., who has worked in corporate responsibility and SRI for more than 30 years, emphasize there are no perfect companies. Daly, executive director of the Tri-State Coalition for Responsible Investment, thinks it's OK to include those which are still working out ESG kinks. "The vast majority of companies fall into that category," she says.

"The great companies in my mind are ones who see this as a five-, ten-, 15- or 20-year plan," says Daly, who has played a role in forcing General Electric to clean up PCB contamination of the Hudson River and is pushing ExxonMobil to address climate change matters.

"True SRI is sort of a personal preference; there's no one right answer...Ben & Jerry's sold high-fat products; that's how you get the idea everything is gray," says Stephanie Leighton, a co-manager of the Green Century Balanced Fund (assets: $53 million) and a portfolio manager and chief investment officer for subadvisor Trillium Asset Management Corp.

Green Century Balanced Fund started holding Costco Wholesale, whose record on engaging with shareholders has been mixed, in November 2009 after the company agreed to produce its first sustainability report following pressure from Trillium and Green Century Capital Management. Pro-employee policies are another plus, says Leighton.

Trillium holds Tiffany & Co. in its managed accounts because the jewelry manufacturer and retailer has been a leader in mining reform and responsible purchasing practices.  "We try to find leaders managing social and environmental challenges better than others," says Leighton.

"SRI is entering its second generation," says Laura Berry, executive director of the Interfaith Center on Corporate Responsibility (ICCR).  The socially responsible investment community is starting to look more at individual corporate analysis, thanks to greater data availability, and mainstream investors are really starting to look at incorporating social issues, she explains.

"More people are willing to look at a company with challenges, flaws and concerns," says Berry. One example is Wal-Mart, which has its share of labor and human rights challenges but is making meaningful progress in supply chain management and environmental issues. "Investors see it moving in the right direction and they want to be part of that directional shift ...This is not selling out in any way. It's a desire to say 'I want to be invested in most sectors where there is economic activity.'"

The scope of investors interested in pushing companies towards change is also expanding. ICCR, whose members are responsible for 83% of advisory resolutions being filed today, is seeing more mainstream co-filers and more institutional activity, including labor unions and foundations, says Berry. The number of people clicking on ICCR's Web site ( has also risen ten-fold over the last three years.

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