U.S. and UK SRI funds set to hire in 2005
To work in financial services you need to ditch your principles and think of the money - right? Not necessarily. It's possible to save the rainforest and still work in finance at the same time.
Socially responsible investing (SRI) is the name given to investments made not just with a view to maximising returns, but to promoting ethical goals. In pursuit of ethical acceptability, SRI funds typically avoid stocks related to alcohol, tobacco and gambling. They might also favour the stock of companies with sound environmental principles or simply good corporate governance.
SRI is a hot topic. Money invested in socially screened funds in the U.S. rose 6% to $2.1 billion between 2001 and 2003. European SRI funds have taken off too, with European SRI investment reaching €336 billion in 2003 according to the European Social Investment Forum. In France alone, SFI funds have close to doubled in size during the year.
Governance scandals such as Enron have helped boost SRI investments. So has the realisation that ethical investing doesn't necessarily mean low returns.
State intervention has also played a part in cheering the sector on. Since 2000, UK fund managers have had to tell pension fund investors whether they considered the ethical, social or environmental impact of their investments. A similar law was passed in France in 2001. The French state-owned retirement fund is expected to open an SRI fund worth as much as €300m ($370m) by the end of the year.
Working in SRI
The bad news for job seekers is that swelling SRI investment has yet to generate a hiring boom. Most funds already have SRI teams; few have plans for immediate expansion. 'There have been a few junior hires and the occasional replacement, but not much else', says Michelle Turner at Hanson Green, a London search firm.
The good news is that extra recruitment is likely soon. Fund managers increasingly use SRI teams to analyse all the companies they invest in, not just those in the SRI sector. Petra Rickmeyer at search firm Hoggett Bowers says extra staff are likely in the next 12-18 months: 'More and more asset managers are using SRI analysis as an overlay to all their funds. It's becoming a lot more mainstream.'
It's a similar story in the U.S. Deborah Brown, a managing director in the asset management practice of Russell Reynolds in New York, says SRI hiring has the potential to take off as funds become more popular: 'If SRI funds can perform on a par with non-socially responsible funds then it's a no-brainer for investors: why not do the right thing and make money at the same time?'
If investors can make money from SRI funds, so can employees. Rickmeyer says after three to five years analysts or fund managers working in the SRI sector can expect base salaries ranging from 85,000 to 95,000 ($160,000 to $180,000). Top salaries in the sector are 110,000 to 120,000. Add to this a performance related bonus, which can double your salary, and helping to save the rainforest looks like a lucrative occupation.
I want to get rich saving the plants. What do I need?
Strong research skills, analytical skills, some financial knowledge, and a passion for all things ethical make a strong start: 'We look for familiarity with a broad range of environmental and ethical issues', says Rachel Crossley, director of investor responsibility at Insight Investment.
Time spent with a non-profit organisation such as the World Bank, UN or IMF is a bonus. So is a Masters degree in an earthy subject. Isis Asset Management in London has 13 people in its SRI team; Karina Lipvack, head of SRI at the group, says most have Masters degrees in subjects ranging from law (good for corporate governance analysis) and development economics to sustainable tourism and environmental management.
You will also need determination. We may be talking ethics, but be prepared to fight your way in. 'The calibre of candidates is getting a lot higher,' says Crossley. 'Lots of people are approaching me. Many have had enough of banking and want to work in the SRI sector instead.'
Click here for an insider's view of working in SRI.
Where should I apply?
Top US SRI Funds include:
KLD Broad Market Social Index Fund (www.kld.com)
Pioneer Fund (www.pioneerfunds.com)
TIIA-CREF Social Choice Equity Fund (www.tiaa-cref.org)
Longview Collective Investment Fund (www.amalgamatedbank.com)
Leading European SRI funds include:
Dexia Asset Management Belgium (www.dexia-am.com)
Henderson Global Investors, UK (www.henderson.com)
Insight Investment, UK (www.insightinvestment.com)
ISIS Asset Management, UK (www.isisam.com)
Jupiter Asset Management, UK (www.jupiteronline.co.uk)
Nextra (Gruppo Intesa), Italy (www.nextrasgr.com)
Triodos Bank, The Netherlands (www.triodos.com)
UBS AG, Switzerland (www.ubs.com)
If you don't make it straight into an SRI fund, socially responsibility ratings agencies, which rate companies on the basis of their social credentials, can be a good start:
Deminor (www.deminor.org - for corporate governance)
Oekom Research (www.oekom.de)
Michael Jantzi Research Associates (www.mjra-jsi.com)
Innovest Strategic Advisors (www.innovestgroup.com)
Investor Responsibility Research Center (www.irrc.org )