KLD launched its global sustainability indexes just last year, offering the company's first broad-based, global benchmarks. The flagship index, the KLD Global Sustainability Index, is accompanied by five regional subindexes covering global ex-U.S., Europe, Asia, North America, and Europe and Asia Pacific combined.

Although there are a variety of global socially responsible investment (SRI) indexes available from large index providers such as Dow Jones Indexes and FTSE, KLD is a well-known index provider and consulting firm that specializes in SRI financial research. And it appears that the new indexes are attracting quite a bit of interest.

Northern Trust rolled out its Northern Global Sustainability Index Fund just last week. The no-load mutual fund charges an expense ratio of just 65 basis points, which is just as cheap as many ETFs. SRI is not a new area for the firm, as it already manages $20 billion in socially screened assets.

TIAA-CREF, on the other hand, is using the index in a totally different way. It is adding the components of the KLD Global Sustainability Index to the investable universe of stocks for its previously all-domestic CREF Social Choice variable annuity account. Previously the KLD Broad Market Social Index had defined the universe of stocks that the account could invest in; now its components have been combined with those of the global index. The change adds about 490 stocks to CREF Social Choice portfolio's investable universe. The portfolio is the largest socially screened portfolio in the United States, with 430,000 investors and $9.2 billion in assets.

Although no products have been launched yet, Pax World Management Corp. has entered into the most wide-ranging agreement of the three licensees. The company has licensed the KLD Global Sustainability Index, the KLD North America Sustainability Index and the KLD Europe Asia Pacific Sustainability Index for use in a variety of investable products. Perhaps most importantly, Pax World has exclusive rights to use the three indexes as the underlying for ETFs and has already filed papers with the Securities & Exchange Commission to get the ball rolling.

Other products would include mutual funds and separately managed accounts that could employ passive, enhanced index or active approaches using the indexes.

The KLD Global Sustainability Index includes nearly 700 stocks from 24 different countries; components have been evaluated according to a variety of environmental, social and governance factors.

A recent Pensions & Investments article notes that socially responsible investment assets were at $2.71 trillion at the end of 2006 and represented nearly 11% of all professionally managed assets, which stood at $25.1 trillion. That works out to an increase of about 18% for SRI assets from the end of 2004, while the total only grew about 3%. It seems that after years of gradual gains, SRI may be coming into its own. Certainly, legislation regarding public pension funds has helped it along, as some have taken steps to exclude certain investments on moral grounds, such as those that have ties to tobacco or to Sudan. But investor awareness is also increasing-and more are demanding or taking advantage of investment choices that will allow them to invest their assets according to their personal beliefs.