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Marc Jay Lane (b. August 30, 1946), pioneer in the socially responsible investing movement through his development of the Adocacy Investing methodology, is President and Founder of The Law Offices of Marc J. Lane, P.C., and its financial services affiliates.
In addition to practicing law and investment advising, Marc is an adjunct professor of law at Northwestern University School of Law; author of 32 books, including Profitable Socially Responsible Investing?, which laid out his research and argument for his Advocacy Investing approach to socially responsible investing (SRI); and signatory to the United Nations Principles for Responsible Investing and the United Nations Global Compact.
EDUCATION
Marc began his undergraduate studies at the University of Illinois at Chicago in 1963. He graduated with honors in 1967, and was awarded a Bachelor of Arts in Political Science. He then worked his way through law school (Northwestern University School of Law) by managing an insurance agency for doctors. After obtaining his Juris Doctor in 1971, he continued to pursue education in various areas during the course of his professional career, including post-doctoral studies in taxation at the John Marshall Law School from 1974-1975, and achieving the designations of Mastered Registered Financial Planner from the International Association of registered Financial Planners in 1987, and Registered Financial Consultant from the International Association of Professional Financial Consultants in 1994.
CAREER
Marc started his law career in 1971 when he formed The Law Offices of Marc J. Lane, P.C. Intending to work in the field of litigation, Marc wound up being diverted by a surplus of medical professionals seeking advice about new tax laws providing benefits for incorporating professional service companies. Advising the medical community on various legal issues pertinent to the medical profession led Marc to abandon litigation altogether and author several books regarding medical practice and the law (Brunts 2002).
In 1984, he formed Longmeadow Insurance Services, Inc., a risk management company. The following year, after realizing there was a market for tax-advantaged investment opportunities, he formed Marc J. Lane & Company, an NASD-registered broker-dealer founded to facilitate the offering of financial services for general securities and investment banking. In 2003, he created Marc J. Lane Investment Management, Inc., a registered investment advisor.
Advocacy Investing In 2005, after conducting an extensive period of research, Marc contributed a major new work to the financial and investment communities when Institutional Investor published his 32nd book, entitled Profitable Socially Responsible Investing? In the book he revealed the findings of his studies, and outlined what he called his Advocacy Investing approach to values-based and mission-driven investing, particularly as it relates to socially responsible investing (SRI) and corporate social responsibility (CSR). He claimed that the research indicated that companies whose performance was exemplary in the areas of social justice (human rights, diversity, and employee relations) and the environment not only provided competitive market returns, but often outperformed the benchmark used, which, in the research study, was the Russell 3000 stock market index.
Although the Advocacy Investing approach was met with enthusiasm and praise by both individual and institutional investors and money managers—landing Marc in multiple media outlets such as CNBC, Forbes, Fortune, The Wall Street Journal, and the Financial Times—it also sparked controversy and skepticism among others, including traditional SRI mutual fund money managers whose methods of negative portfolio screening were attacked in Marc’s book. According to Marc and other critics of negative screening, a “performance penalty” is exacted upon a portfolio whenever a negative screen is applied (Lewis 2006). Academic research done by others, such as Christopher Geczy, an assistant professor of finance at the University of Pennsylvania's Wharton Business School, suggests that investment portfolio screens can sometimes result in “inadequate diversity to buoy lackluster [performance] in down markets,” resulting in “lower [average] annual returns” (MacDonald 2006).
Around the same period of time, research came out from the sell-side of Wall Street, confirming and complimenting the findings of Marc's published research. Analysts from major global financial firms, such as Shirley Hudson and Julie Knott of UBS Global Equity Research, published reports stressing the importance of CSR and its impact on shareholder value. Hudson and Knott’s theme piece, “Why Try to Quantify the Unquantifiable?” was both an important and controversial research article by the firm in that it was its first formalized report objectively quantifying the business risk associated with CSR issues. Although it wasn’t its first report related to SRI, UBS reported that with the increased customer demand for SRI-related reporting and research, such an effort was warranted. According to Hudson and Knott, “We think the concept that SRI represents is of genuine importance to all investors, as well as the SRI specialists. We believe it is becoming increasingly clear that society is… penalizing companies that do things that, though arguably legal at the time, turn out to have antisocial effects; and equally clear that firms are, increasingly, competing to get Corporate Social Responsibility (CSR) issues right” (Hudson and Knott, 2005).
In addition, the United Nations Environment Programme Finance Initiative (UNEP FI) Asset Management Working Group published two separate reports (“The Materiality of Social, Environmental, and Corporate Governance Issues to Equity Pricing” in 2004 and “Show Me the Money: Linking Environmental, Social, and Governance Issues to Company Value” in 2006) compiled from global brokerage firms’ analysts' research. These reports aimed to prove the validity of Environment, Social, and Governance (ESG) factors as they relate to business enterprise valuation and shareholder value.
In February 2007, Marc launched a national marketing initiative to advance the mission of the SRI and CSR movements through collaborative enterprise and joint educational efforts focused on taking the Advocacy Investing approach and SRI mainstream. As part of this initiative, his financial services firm, Marc J. Lane Investment Management, Inc., became the first registered investment advisor to host a public community bulletin board online -- called The SRI Open Forum ([1]) -- specifically devoted to socially responsible investing. He has since gone on to begin writing a 33rd book entitled Advocacy Investing, a non-technical book explaining his Advocacy Investing approach to SRI.
REFERENCES Brunts, Julia. “From seed of law, he grew a business”, Chicago Daily Law Bulletin, December 9, 2002.
Hudson, Julie and Shirley Knott. “Why Try to Quantify the Unquantifiable?”, UBS Investment Research QSeries®: Corporate Social Responsibilities, April 11, 2005.
Lewis, Geoff. “Advocacy Investing—Catnip for Wealthy Clients?”, Registered Rep, June, 2006.
MacDonald, G. Jeffrey. “Investors screen companies through a positive approach,” The Christian Science Monitor, January 23, 2006.
