H.C.R. NO.














encouraging and requesting a report on socially responsible investment.




     WHEREAS, Socially Responsible Investment (SRI), also known as triple-bottom line investment, mission-related investment, and natural investing, is the rapidly growing practice in the United States of basing investment decisions on considerations of societal values and concerns as well as financial returns, thus balancing the investor's financial aims and needs with an investment's impact on society by the operations of the corporation or entity in which the investment is made; and


     WHEREAS, distinct but related aspects involved in an SRI strategy are:


(1)         Avoiding companies whose record conflicts with the   investor's values;


(2)         Seeking out companies whose record is consistent with     the investor's values;


(3)         Targeting investments directly into communities; and


(4)         Taking an active role as a shareholder in influencing      corporate policies; and


     WHEREAS, socially conscious investors will often include in their investment portfolios corporations with positive records on product quality, consumer relations, environmental performance, corporate citizenship, and employee relations while screening out corporations involved in industries such as alcohol, tobacco, gambling, military weapons, and nuclear power; and


     WHEREAS, investments that are sound from a fiduciary standpoint and which also promote equality of opportunity, environmental protection, and other causes critical to Hawaii's long-term future, have what is known as a "triple bottom line" return; and


     WHEREAS, SRI has its roots in the colonial era when abolitionist Quakers refused to invest in any business associated with slavery, and blossomed in the 1970s, influenced by strong social movements focusing on the environment, fair employment practices, the military-industrial complex, and the rights of minorities and women; and


     WHEREAS, in the 1980s, anti-apartheid activists brought the idea of socially responsible investing into full public view by insisting that their schools and churches stop investing in companies which did business in South Africa; and


     WHEREAS, this very successful campaign to remove foreign capital from South Africa marked a powerful new era for SRI; and


     WHEREAS, the SRI movement has rapidly increased its strength since the early 1990s as the financial world became more aware of the force of social movements; and


     WHEREAS, as SRI funds have become well established, they have demonstrated their financial soundness showing that not only are social and environmental concerns not a handicap in investing, but that social and environmental values and standards can actually correlate with superior financial performance; and


     WHEREAS, SRI can have significant beneficial consequences for the State of Hawaii in that SRI can help promote the growth of mercantile entities presently doing business here and who engage in business practices that enhance and promote Hawaii's fragile environment and contribute to the well-being of Hawaii's population, and can also be helpful in attracting other businesses that engage in similar practices; and


     WHEREAS, the Legislature wishes to encourage our state's financial institutions, financial advisors, banks, trust companies, trustees of our state's funded and landed trusts, trustees of the State of Hawaii Employees' Retirement System, and all other individuals and entities handling and managing financial investments, to become more familiar with the principles of SRI and to apply those principles to their financial advice and decisions; and


     WHEREAS, a lot has changed in the industry since the last study was conducted ten years ago that would likely result in a more favorable conclusion about the inclusion of sustainable and responsible investment within the state retirement system; and


     WHEREAS, during the 2011 Regular Session the Legislature passed and the Governor enacted Act 209, which authorizes a designation and code of conduct for a business corporation to offer entrepreneurs and investors the option to build and invest in businesses that operate in a socially and environmentally sustainable manner; and 


     WHEREAS, the Legislature appreciates and recognizes that value of SRI to the State, and wishes to foster and encourage wider discussion, understanding, acceptance, and practice of SRI in the community; now, therefore,


     BE IT RESOLVED by the House of Representatives of the Twenty-sixth Legislature of the State of Hawaii, Regular Session of 2012, the Senate concurring, that the Legislature encourages the Chief Investment Officer, Administrator, and trustees of the State Employees' Retirement System to apply the principles of SRI in their investment practices and decisions, and encourages other investment counselors and money managers to also apply SRI to their investment portfolios; and


     BE IT FURTHER RESOLVED that the Legislative Reference Bureau is requested to submit a report of findings and recommendations to the Legislature no later than twenty days prior to the convening of the 2013 Regular Session; and


     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Governor, the Employees' Retirement System, the Department of Business, Economic Development, and Tourism, the Chamber of Commerce of Hawaii, and the Director of the Legislative Reference Bureau.









Report Title: 

Socially Responsible Investments