Heavy Impact

You knew it would happen.

With alternative investments multiplying faster than a furry tribble, it was only a matter of time before they hit the socially responsible investing space. And that time is now.

In mid-December, the Renewable Energy Industrial Index (RENIXX) hit its lowest point ever. The index tracks 30 of the largest green energy producers. It reached its nadir just as news broke that A123, a Massachusetts-based company that manufactured electric car batteries and received a $249 million federal grant, was purchased by China’s largest auto parts maker at a bankruptcy auction.

It reminds us that although it might lead to a better sense of satisfaction and self-worth, green investing still struggles to deliver greenbacks. It encourages critics of SRI, ESG and other screens to argue for chucking it all, investing for maximum return no matter the sector or industry, and donating part of the proceeds to pet projects.

Tim Freundlich doesn’t buy it.

“Is investing [in general] purely economically driven, like in a really fundamental sense?” the president of Impact Assets rhetorically asked. “No. It’s all sorts of stuff including ego and brand. So I just reject it as too simplistic.”

Impact Assets is a donor-advised fund dedicated to the concept of impact investing, a next-gen SRI play that “takes the best of the for-profit and the nonprofit systems and blends them to yield social, environmental and financial returns.” It’s a spin-off from the Calvert Foundation, which is convenient, since Freundlich has zeal for the cause bordering on religious.