Socially Responsible Investing

Several of the founders of The Trust Company of Vermont were responsible for the creation of one of the first socially responsible Common Trust Funds in the country. The fund was created in the mid 80's, partly in response to those clients wishing to avoid companies that had investments in South Africa, and partly through our own expectation that accounts could benefit by investing in companies that acted in a reasonable and responsible manner. This fund was designed to screen out securities that did not meet broad Socially Responsible Investing (SRI) criteria.

Today, we feel there are sufficient numbers of SRI mutual funds to meet the needs of SRI investors seeking participation in broadly managed funds, so we did not feel the necessity to create and maintain an in-house fund. As a consequence, we have implemented an additional element to our traditional investment management program that will allow our managers to incorporate our client's values into the investment process. This service dovetails nicely with our use of individual stock and bond securities and our customized account management approach.

We call this service our Stewardship Program and there are two variations. The Stewardship Managed Asset Service is designed to exclude securities in accordance with SRI criteria selected by the client. The screens are absolute and exclude companies regardless of their positive attributes. For example, most clients exclude all companies with any involvement in the production of tobacco products.

The Stewardship Advisory Service, the most popular, allows the client to work with our managers to arrive at an SRI screened account that accurately represents their principles and ideals. Our managers use qualitative screens, provided by KLD, which highlight each company's strengths and concerns, thus allowing us to evaluate the entirety of the company. The qualitative screens highlight a company's behavior, both positive and negative, regarding the environment, the community, employee relations, products and so on. Thus, gradually, the manager and the client, collectively, create and shape a portfolio that accurately reflects our client's values.

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