SOCIALLY RESPONSIBLE INVESTING:
Corporate governance, disclosure, transparency
and our future
Feigenbaum and Ted Ketcham
What a year.
Corporate America got called on the carpet for its dramatically
less-then-ethical behavior that costs thousands of people jobs and
trillions of dollars of investment capital. Bad news all around, - or
was it? The constant bad news from corporate America has already begun
to create reforms, including a renewed call for corporate responsibility
and governance. It seems that business has collectively turned a corner.
As we learn these expensive financial and social lessons (stock market
down an average of 30 percent a year in the last three years), a new
world of disclosure, transparency and accountability is unfolding.
This new world also depends on SEC enforcement and oversight in the
financial and accounting industry. Investors lost trillions, - yes
trillions - in stock value and perceived wealth (on paper). It seems
"Reform" is the buzzword for this decade - as it will take that long -
with so many special interests still competing for the ears of power.
Uncovering and disclosing the special interests, from the White House to
Wall Street, is important. Will the Bush administration give the SEC
adequate funds to do its job better? The SEC has recently mandated
disclosure of proxy voting policies, procedures and voting records by
all mutual funds and investment advisors. Many of the socially
responsible mutual funds have already been doing this, including Pax,
Domini, Calvert, Citizens, and others. The rest of the mutual fund
industry must now follow the lead of the Socially Responsible Investing
(SRI) industry. Fidelity and Vanguard management fought against this
positive change for full disclosure. Remember that when you invest.
SRI is getting a lot of attention from an ever-widening audience of
individual and institutional investors. Screened mutual fund assets,
community investing, and shareholder activism are all on the rise. The
media, too, has continued its more positive coverage of SRI. The triple
bottom line of people, profits and planet is more important than ever.
SRI will be more ambitious and effective in the next few years,
especially in business school curriculum and financial analyst training,
while strengthening its own social
investment criteria. SRI could provide the key to returning investor
confidence to the markets.
So here we go. You have in your hands the newly re-designed issue of The
GreenMoney Journal. In this issue: the President of the Social
Investment Forum, Tim Smith, presents an overview of what's happening
and what's ahead in SRI. We continue our commitment to present new
ideas; this issue's special article is on "Social Change Philanthropy"
by Tracy Gary and Lisa Tracy. Also you'll find a profile of one of
industry's top online resources, SRI World, and GreenMoney co-editor Ted
Ketcham reviews an important book by Lester Brown, The Eco-Economy.
This issue also includes a challenging "Letter to the Editor" from
author, speaker and respected friend Paul Hawken, which we have
reprinted on page 7. We also include some shorter responses from
companies like Chiquita and Horizon Organic as well as a lengthy
response from Amy Domini, all of whom were mentioned in Paul's letter.
GreenMoney is pleased to host this important SRI and business dialogue.
Exclusively online at greenmoney.com you'll read a review of the major
investing book of 2002, The SRI Advantage, by Peter Camejo and an
article by the Community Development Venture Capital Alliance. Also
online, the now infamous and always up-to-date "GreenMoney Investing
Resources" list which includes books and numerous SRI web sites.
Looking ahead, our next SRI-focused issue (Fall 2003), will profile many
different SRI Indexes, including KLD, FTSE and Dow Jones Sustainability.
We will look at CERES and the Global Reporting Initiative as well as the
latest on Shareholder Activism for 2003. Additionally, we will list the
ever-increasing number of Socially Responsible Investing and Business
conferences in late 2003 and early 2004 in the US, the UK, Europe and
We close this issue by asking what is ahead for our world and how can we
build a bridge to a future in which everyone is invited? These questions
were heartfully answered by former President Jimmy Carter. In his Nobel
Peace Prize acceptance speech he declared, "we cannot have peace in the
world if we keep killing each others' children," and "America must share
its wealth to nations who need it around the world." May this year be
one of Peace.
And finally, in a recent Doonesbury cartoon we were reminded of how all
of us need to get more political active in the next couple years. The
cartoon shows a discussion set in the Bush White House, it went as
Okay, Let's move on to our contributors from the extraction industries -
is everyone happy there?
Very sir! With all the nationals security distractions, we've been able
to quietly gut one environmental protection regulation after another...
For instance, we've produced new rules to speed up logging in National
Forests, rolled back protections of 58 million acres from roads and
developments, eased pollution controls for power plants and factories,
rejected new fuel-efficiency standards, sped up permit-granting for
Lifted a ban on snowmobiles in Parks, proposed 51,000 new natural gas
wells, removed limits on coal producers for dumping mountaintop fill in
streams, reduced EPA fines of polluters by 64%, opened up Padre Island
to drilling, halted funding for several Superfund sites, replaced
scientists who don't support our views, rejected the Kyoto global
warming treaty, and much, much more!
Whoa...that's quite a list....
Does Christine Whitman still work for us?
I can check.