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Last week, I spoke at a meeting of the Chicago chapter of Women Advancing Microfinance along with Caroline Allen of Creation Investments. Here’s a recap of my speech:

Essentially, we can think of social investing two ways. One is finding investments for people who want to invest socially, and the other is improving the environment, social conditions, and corporate governance. All of this is against a backdrop of struggling financial markets and tremendous upheaval in the United States and Europe.

Starting with the environment, I think the opportunities are becoming more limited. The Kyoto Treaty has fallen apart, and the European Union, which has tougher environmental regulations than the US, has bigger issues to deal with now (including whether or not there will still be a European Union.) The situation with Solyndra means that the US government will be less supportive of research in alternative energy. Investors can buy stock in Chinese solar companies, but the number of stock frauds aimed at US investors has grown and made a lot of people nervous. Unfortunately, I think this limits the number of opportunities to make money investing in environmental change.

On the social side, we’ve seen some really interesting trends, led in part by the Occupy movement. No matter how people feel about the protesters themselves, there is a lot of frustration with how American banks have conducted themselves in the light of the federal bailout. The big beneficiaries have been credit unions, which picked up an estimated $4.5 billion in deposits on Bank Transfer Day, November 4, 2011. This may make the credit unions stronger and more attractive for depositors; they may also become a bigger source of community lending.

Finally, on the governance side, the combination of Occupy and general frustration with the economy is causing more people to ask questions about executive pay and corporate taxation. When Mitt Romney released his tax returns, he made a lot of people aware of just how many legal opportunities there are for wealthy individuals and businesses to shelter income. That will end up being addressed at some point by different changes in disclosure regulations and tax law, which is good for overall transparency. On top of that, the Securities and Exchange Commission has been aggressive about pursuing insider trading violations, which improves the overall market climate.

Stronger credit unions and better transparency are good for the entire financial system. However, I don’t see a lot of great opportunities that would make social investing do better than any other investors. Social investing doesn’t have to underperform, but it’s not likely to outperform this year.