Understanding the Power of Understanding the Power of Our MoneyOur Money

An Introduction to SRIAn Introduction to SRI(Socially Responsible (Socially Responsible

Investing)Investing)Sister Ruth Rosenbaum, TC, PhDSister Ruth Rosenbaum, TC, PhDExecutive DirectorExecutive Director

CREA: Center for Reflection, Education and ActionCREA: Center for Reflection, Education and Action

PO Box 2507PO Box 2507 TEL: 860.527.0455TEL: 860.527.0455Hartford, CT 06146-2507Hartford, CT 06146-2507 www.crea.org

Email: Email: crea@crea.org

A Story from my last A Story from my last Foundation ConferenceFoundation Conference

A mother called

A child was in dangerThe CSA HS agency she called responded

Immediately…and with a sense of urgency

Protect the child

Assist the mother

Analyzing the situation:

She knew there was someone to call

-The response was not just for the child

-But also for the mother

In many other places, the response would have been only to assist the child

Response of charity

Response of Advocacy Response of Advocacy

Assist the motherAssist the mother Not only to provide the needed foodNot only to provide the needed food But also to make sure the mother was But also to make sure the mother was

not charged with abandoning her childnot charged with abandoning her child AIM: Keep the mother and child togetherAIM: Keep the mother and child together Question: How to provide what they Question: How to provide what they

need?need?

Systemic QuestionsSystemic Questions

Where did the mother work?Where did the mother work? What were her wages? Did she earn What were her wages? Did she earn

a sustainable living wage?a sustainable living wage? Was she able to work full-time or Was she able to work full-time or

part-time?part-time? Did she receive benefits?Did she receive benefits? Was it hard for her to find a Was it hard for her to find a

job?...and why?job?...and why?

Systemic Issues and SRISystemic Issues and SRI

SRI is a tool to use the power of our SRI is a tool to use the power of our investments to bring about systemic investments to bring about systemic changechange

Deciding to do SRI is about Deciding to do SRI is about recognizing the power we have to recognizing the power we have to bring about the systemic change we bring about the systemic change we wantwant

Some SRI historySome SRI history

Screening – deciding there are things Screening – deciding there are things from which you are unwilling to make from which you are unwilling to make moneymoney Traditional “sin stocks” – alcohol, tobacco Traditional “sin stocks” – alcohol, tobacco

and gamblingand gambling TODAY: What are the systemic “sins” that TODAY: What are the systemic “sins” that

affect persons, communities, the affect persons, communities, the environment? What are our values, as environment? What are our values, as persons, as institutions, as communities? persons, as institutions, as communities?

Shareholder ResolutionsShareholder Resolutions

Shareholders can file shareholder Shareholders can file shareholder resolutions on specific issues to address resolutions on specific issues to address ways in which they want companies to ways in which they want companies to change their programs, policies or change their programs, policies or practices..practices..

Shareholder Resolution Requirements: Shareholder Resolution Requirements:

For any publicly traded US companyFor any publicly traded US company Own at least $2,000 of stockOwn at least $2,000 of stock For at least 12 continuous months For at least 12 continuous months

Example: South AfricaExample: South Africa

Question: How to bring about the collapse Question: How to bring about the collapse of apartheid?of apartheid?

Shareholders filed resolutions asking Shareholders filed resolutions asking companies to divest from operations in companies to divest from operations in South AfricaSouth Africa

Reasoning: Taxes paid to the South African Reasoning: Taxes paid to the South African government by foreign companies government by foreign companies provided the majority of the funding for provided the majority of the funding for the apartheid governmentthe apartheid government

Supporting Other ResolutionsSupporting Other ResolutionsProxy VotingProxy Voting

What is a proxy?What is a proxy? Process of VotingProcess of Voting Sample issues:Sample issues:

Shareholder Advocacy: Shareholder Advocacy: Working for Systemic ChangeWorking for Systemic Change

Most of the shareholder work these Most of the shareholder work these days involves extensive and days involves extensive and complicated dialogues and complicated dialogues and negotiations with corporationsnegotiations with corporations

Some corporations come to Some corporations come to dialogues as a result of resolutionsdialogues as a result of resolutions

Others respond to letters and Others respond to letters and telephone calls from shareholders telephone calls from shareholders

Why dialogue and Why dialogue and negotiate?negotiate?

The issues are complicatedThe issues are complicated There are no simple answersThere are no simple answers Shareholders must bring expertise to Shareholders must bring expertise to

the negotiating tablethe negotiating table

International Coffee CrisisInternational Coffee Crisis

Coffee farmers and their families Coffee farmers and their families around the world were starving around the world were starving because of low, low coffee prices on because of low, low coffee prices on the international marketthe international market

Shareholder resolution filed with P&G Shareholder resolution filed with P&G asked them to buy and sell Fair asked them to buy and sell Fair Trade certified coffeeTrade certified coffee

Expertise needed for Expertise needed for dialogue and negotiationdialogue and negotiation

Understanding the Fair Trade systemUnderstanding the Fair Trade system Understanding the coffee system: how Understanding the coffee system: how

coffee gets from the farmer to the coffee cupcoffee gets from the farmer to the coffee cup Understanding the biology of shade grown Understanding the biology of shade grown

coffeecoffee Understanding the role of shade grown Understanding the role of shade grown

coffee in water stabilization and prevention coffee in water stabilization and prevention of droughtof drought

Result: P&G now sells 4 types of Fair Trade Result: P&G now sells 4 types of Fair Trade certified coffeecertified coffee

Issue: Human Rights and Labor Issue: Human Rights and Labor Rights in Supply ChainsRights in Supply Chains

Components in a Supply ChainComponents in a Supply Chain Who benefits, who losesWho benefits, who loses Industries using supply chainsIndustries using supply chains

Issue: HIV/AIDS, Malaria, TBIssue: HIV/AIDS, Malaria, TB

Work that has been doneWork that has been done Shareholder resolutionsShareholder resolutions Assessment of corporate programs to Assessment of corporate programs to

supply medicationssupply medications Assessment of corporate programs to Assessment of corporate programs to

suppy educationsuppy education

PROBLEM: the Security and Exchange PROBLEM: the Security and Exchange CommissionCommission

Work to Write an New Work to Write an New ResolutionResolution

Linking it to previous work on supply Linking it to previous work on supply chainschains

Discussions with NGOs in other countriesDiscussions with NGOs in other countries Discussions with NGOs in USDiscussions with NGOs in US Discussions with health care providers in Discussions with health care providers in

US and other countriesUS and other countries

……the new idea: A Sustainability Resolutionthe new idea: A Sustainability Resolution

Using Sustainability as the Key Using Sustainability as the Key to Assessing HIV/AIDS, TB, to Assessing HIV/AIDS, TB,

Malaria ProgramsMalaria Programs

Key 1: SEC approves sustainability Key 1: SEC approves sustainability resolutions resolutions

Key 2: Institutional shareholders vote Key 2: Institutional shareholders vote FOR FOR sustainability sustainability resolutionsresolutions

Using Sustainability as the Key Using Sustainability as the Key to Assessing HIV/AIDS, TB, to Assessing HIV/AIDS, TB,

Malaria ProgramsMalaria Programs

Key 3: Moves treatment for these Key 3: Moves treatment for these diseases diseases away from away from stigmatization and stigmatization and allows allows patients to be seen as patients to be seen as functioning members of functioning members of sustainable communities sustainable communities