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January 09, 2004

Robert Zevin, a Father of Socially Responsible Investing
    by William Baue

Robert Zevin helped establish socially responsible investing by fusing traditional investment theory with social justice advocacy, among many other achievements.

SocialFunds.com -- Some of the best marriages join unlikely bedfellows, whose differences create more dynamism than similarities could. Socially responsible investing (SRI) was born of the union between traditional financial analysis and social justice advocacy, a seemingly odd coupling that can be, as it turns out, mutually reinforcing.

Robert Brooke Zevin is one of the progenitors responsible for this fusion.

"I always introduce Bob Zevin as the father of socially responsible investment," Terry Mollner, a founding board member of the Calvert Group, told SocialFunds.com.

After doing graduate work in economics at Harvard in the early 1960s, Dr. Zevin taught economics there and at the University of California, Berkeley and Columbia. In 1967, he founded his own money management firm, Robert Brooke Zevin Associates.

"My clients, whom I found because of my social activism, were the people who actually moved me toward SRI in the 1960s," Dr. Zevin told SocialFunds.com.

Geeta Aiyer, president of Boston Common Asset Management, which currently shares offices with Robert Brooke Zevin Associates, explains.

"Robert's clients came to him uncomfortable with the contradiction between their participation in Vietnam-era peace demonstrations and their stock ownership in companies that made Agent Orange and other weapons of destruction," she said. "For someone trained in traditional investment theory and economics and mathematics, it would have been easy for him to give them the traditional answer of separating their investments from their social mission, using the one to make money and the other to write checks to support their causes."

"Instead, he integrated Modern Portfolio Theory with social goals," Ms. Aiyer continued. "By putting the two objectives on the par, and not making one be compromised by the other, he opened up the doors for SRI to become a more mainstream pursuit."

Dr. Zevin considers himself one of the first investors to explicitly apply Modern Portfolio Theory to investment decision-making.

"In some ways, I regret that the 'father of SRI' moniker has obscured this other part of me, of which I am equally proud," Dr. Zevin said.

In 1975, Dr. Zevin became senior vice president of investments at the United States Trust Company (now known as Boston Trust & Investment Management Company), where SRI funds grew from $10 million that year to $40 million in 1980, according to Dr. Zevin. This track record served as the best business case for SRI, according to Ms. Aiyer, until the advent of the Domini Social Index, which outperformed the S&P 500 for a decade.

In the late 1970s and early 1980s, Dr. Zevin played a pivotal role in the founding of the Calvert Group's first SRI funds. His presence helped legitimize the notion of applying social and environmental screens to public mutual funds.

"Robert's most radical social investment idea was that his clients' money was theirs, and what they did with their lives was more important than what they did with their money, an almost unheard-of viewpoint in a profession amok in hubris and paternalism," said Stephen Moody, a principal of Walden Asset Management. "He also understood that without achieving their financial objectives, clients would be less able to achieve their political and social objectives."

Dr. Zevin was also instrumental in the movement to divest from apartheid South Africa.

"Robert was passionately interested in the struggle for equal rights in South Africa," said Amy Domini, founder of Domini Social Investments. "His testimony on behalf of the divestment movement regarding the City of Baltimore led to one of the pivotal moments in the divestment movement."

In 1989, the court upheld the Baltimore City Council's right to direct the city's pension trustees to screen out investments in companies doing business with apartheid South Africa, setting a legal precedent for other municipalities and institutions to divest.

In 1997, Dr. Zevin retired from US Trust and returned to Robert Brooke Zevin Associates, where he continues to actively manage his clients' money while continuing to provide a guiding voice to the SRI community.

"SRI will continue to grow in its share of total invested money in the US and in the world," Dr. Zevin said. "As it penetrates more conventional financial institutions, it may well be diluted in various ways, which is why it is so important to keep the primary focus on the achievement of social change rather than moral purity or investment returns, as desirable as they may also be."

© SRI World Group, Inc. All Rights Reserved.

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