Lisa Woll, Social Investment Forum CEO, predicts steadily increasing interest in SRI options in the near future. Eighty-one percent of plan administrators, 72% of consultants, and 47% of plan sponsors agree, predicting an increasing or steady demand for SRI over the next 5 years, the report found. "Socially responsible retirement options are becoming a fixture of corporate America's retirement plans," Woll says. "This is good news for investors and their employers. More and more Americans are interested in SRI funds because they offer a way to save for retirement, improve corporate responsibility and achieve significant environmental and social goals. Companies that offer then are providing a real benefit to their employees."

Intel, a $39 billion maker of computer chips, is one company that offers employees an SRI fund option. According to Dave Stangis, director of corporate responsibility at Intel, SRI options are compatible with business goals. "As a company continually striving to lead in socially responsible business practices, it just made good business sense to have an option that allowed our employees to put their money where their hearts are," he said. "Our employees are diverse and have strong views on why it's important for the company they work for to be socially responsible. Part of meeting that expectation, now and in the future, means having 401(k) investment choices that are broad and include SRI options."

Companies with a business or corporate focus on environmental or social issues may be more likely to add an SRI option to their existing options. But Mercer believes that companies across all sectors will soon join the movement. "As institutional investors continue to consider environmental, social and governance issues within their investments and as these issues retain their prominence in the news, Mercer IC believes that overall demand for socially responsible investment options by DC participants will grow," the report says.

"Mercer has been helping a growing number of DC clients provide an SRI option for their participants," says consultant Craig Metrick. "We put SRI funds through the same rigorous selection process that is applied to traditional investment options. As fiduciaries, plan sponsors need to consider the merits of SRI overall, as well as the characteristics of the various investment options."

Companies planning to add a socially responsible investment (SRI) option to their 401(k) plan need information. For example, should an SRI option be evaluated differently than any other investment? The Social Investment Forum and Mercer have created a resource guide that will help answer such questions. The guide, available at www.socialinvest.org/areas/research/other/ContributionPlansandSRIinUS.pdf, points out that plan sponsors typically use the same criteria to evaluate SRI funds and non-SRI funds. They consider past performance and volatility, and often use non-SRI indexes to evaluate the funds.

The Social Investment Forum and Mercer's survey results, also available at the above web address, says that health care and government organizations are so far the employers most inclined to offer an SRI option. It also found that misperceptions continue to exist among plan sponsors about the competitive track record of SRI funds and fiduciary issues surrounding them. This, according to the Forum, represents an opportunity to educate plan sponsors and the public. Consultants, advisers, and fund companies need to play a vital role by providing this education, they say.