What Is Green Investing:
Historical Overview of Socially Responsible Investing (SRI)

Religious investors are generally considered to be the first socially responsible investors. In the early days of investing,some churches kept investments out of "sinful" industries. In the 1960's and early 1970's, many religious institutional investors were looking to invest their money wisely for the future without abandoning their beliefs. Interest grew during the 1970's and 1980's when South African divestment greatly expanded the notion of SRI. A solution for investors was to analyze the companies in which they invested not only for financial performance, but for their social and environmental performance as well. Often, companies that had poor records on these issues were excluded, or screened, from consideration. Sometimes, entire industries were also excluded from investment if the operation of these industries violated the investor's principles. The tobacco industry was one of the first industries to be entirely excluded from some investors' portfolios. This type of screen is known as a negative screen because it excludes those companies that fail to meet an investor's criteria.

Over time, more and more mainstream investors chose to invest responsibly, as many people came to believe that investing responsibly was not only a moral imperative, but also a powerful tool for changing the world. Positive screens were created so investors could identify those companies that they wanted to support as well as those that they wanted to avoid.

In addition to the selection of companies, some investors became more active owners of the companies in which they invested. These investors used shareholder advocacy to encourage corporations to change their ways.

We believe the anti-apartheid movement was a watershed for responsible investors because encouraging divestment in South Africa was one of the first major shareholder campaigns.

Through the years, the responsible investing movement has continued to grow. The Social Investment Forum (SIF), an association of socially responsible investing firms and professionals, states that at the end of 2002 over $2 trillion was invested according to some responsible investing criteria. According to SIF data, the industry continued to grow faster during 2001 and 2002 than mainstream investing channels, while the broader universe of professionally managed portfolios fell four percent.

As we stand in the early years of a new century, we believe responsible investing is an idea whose time has come. In our opinion, the industry is poised to continue to grow and increase its ability to change the world in positive ways. Green Century Capital Management is committed to being part of this growth, and to using the power of its role as an investor to protect the environment for all of us and for future generations.