Thanksgiving is the quintessential American holiday. Held the penultimate Thursday in November, it oftentimes ranks as more important to extended families than Christmas/Hannukah celebrations in December. With major highways and airports becoming legendary logjams, K and I were able to scoot north to Vermont midday Wednesday before the lemmings left Boston.
Vermont is a unique state in the American psyche. Renowned for its clean countryside [billboards are banned], rugged New Englander independence, and the eponymous Green Mountains, VT is home to a mix of fierce “red staters” hunting and shooting, including National Guard volunteers, wealthy but outdoorsy city people [flatlanders to the locals] who escape New York, New Jersey or Boston for the lifestyle, and crunchy granola types in Subarus, Saabs and Volvos as far as the eye can see, VT being the last resting place of many of the 1960’s hippie generation. While many VT policies point toward a “green” orientation, including incentivized alternative energy, it is also home to the Yankee Nuclear plant near Brattleboro in the south of the State. Distinctive VT businesses are mostly service sector, with outdoors activities like skiing, kayaking, and hiking being endemic. General tourism includes a solid antiquing industry.
Vermont's long history of farming is threatened by emerging mega-farms and the low product prices, so it supported from Montpelier, and the dairy farms that formed the competitive advantage for Ben & Jerry’s superb ice cream are teetering. The state is also home to the 2006 top-ranked listed company in the Business Ethics 100, Green Mountain Coffee [GMCR], whose practices were so impressive and within the corporate DNA, they actually won the award long before they put out their first CSR report [released in October 2006].
VT has hosted the Green Mountain Summit on Investor Responsibility since inception, an event pitched mostly at institutional SRI niche. I first got acquainted with the conference when I spoke in April 2004 on my B-school study on pension fund trustee attitudes to ESG factors in 2003 I developed with Prof. Jon Doh at Villanova University. The VT state treasurer Jeb Spaulding has remained a positive influence for ESG factors in investment decisions. VT has a variety of tertiary institutions with a sustainability curriculum, with UVM [University of Vermont] B-school, Vermont Law School [a small but strong law school focused on environment] which I enjoy including in my 3.5 hour road cycling route, and the School for International Training [SIT] which has a Net Impact chapter. VT is remarkably sensitive to climate change issues, with agriculture and outdoor industries impacted by weather changes, like the tapping of maple trees for their “liquid gold” and ski areas having to manufacture snow [sign of global warming: ever tried to find someone to buy into a snow ski operation lately?!]. The Septemebr/Octber months sees many tourists for the “Fall foliage” season [when the forests change to beautiful gold, bronze and burgundy colors as the temperature change initiates their change to autumn foliage]. Screwy weather patterns risks even this rite of passage.
My father-in-law is a quintessential socially responsible professional, having dedicated his whole medical career to not-for-profit practice. In my book, anyone investing his own career in a SR practice is making the biggest possible SRI move. The Doctor is also a great personal demographic for understanding the thinking of the average SRI investor. He bikes in the backwoods almost daily, will debate until his veins stand up with his Republican brother-in-law [we have to watch them at parties!], and is a member of AARP and NRDC. The Doctor is fairly financially literate, and a dedicated reader of Consumer Reports for all things, including the Money Adviser publication. While a large chunk of wealth is in the home [typical of the average American], his mutual fund investments are balanced into international portfolios, and a fair portion in TIAA-CREF mutual fund.
Browsing the December 2006 Money Adviser [Consumer Reports], I found a fascinating little window into the SRI retail market. Apparently they surveyed their subscribers, with 25% respondents reporting “yes” and their answers breaking down below. As I was finding my work at the major SRI rating firm in Boston, the largest area of interest is in environmental issues. Of course I would be interested in what the vendor breakout is, and mapping to other consumption patterns, particularly items with easy profiles like energy star appliances, fluorescent bulbs, and hybrid cars. One distinction I valued was the breakout between socially “conservative” vs. “liberal” value sets. I foresee the “socially conservative” market as a latent force in values-based investing, and one which current providers have no clue on how to address, but more about that in another post. Chatting to the Doctor raised another few issues as I tried to map what would have been his answers: firstly, the low response rate reflected in the good Doctor being away saving lives and without time to complete the survey, secondly his vagueness on his current vendor, and thirdly the lack of clarity about exactly which buckets his vendor would cover [we settled on environment, socially liberal and humanitarian]. This reflects the general malaise in investment marketing, where clients lack the fluency with their investment portfolio.
Much to reflect on, but now to raise a glass of fine red from California: it's not even 5 pm and the forests of VT are dark and cold. The snow will be coming soon [hopefully]…
Quickpoll > Money Adviser Consumer Reports December 2006 > Have you invested in socially conscious mutual funds or do you plan to?
Environmental/green
43%
Socially conservative
29%
Socially liberal
20%
Other
16%
Humanitarian/Aid
15%
Donor Assisted
8%
n=514 [25% of subscribers], conducted May 2006. Answers reflect answers only of the 25% of respondents who replied yes to initial poll question. Results do not add to 100% [multiple possible answers]. Responses are representative of subscribers but not of the general public.
