Understanding the Power of Our Money An Introduction to SRI (Socially Responsible Investing) Sister Ruth Rosenbaum, TC, PhD Executive Director CREA: Center for Reflection, Education and Action PO Box 2507TEL: Hartford, CT www.crea.org

A Story from my last Foundation Conference A mother called A child was in danger The 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 Assist the mother Assist the mother Not only to provide the needed food Not only to provide the needed food But also to make sure the mother was not charged with abandoning her child But also to make sure the mother was not charged with abandoning her child AIM: Keep the mother and child together AIM: Keep the mother and child together Question: How to provide what they need? Question: How to provide what they need?

Systemic Questions Where did the mother work? Where did the mother work? What were her wages? Did she earn a sustainable living wage? What were her wages? Did she earn a sustainable living wage? Was she able to work full-time or part- time? Was she able to work full-time or part- time? Did she receive benefits? Did she receive benefits? Was it hard for her to find a job?...and why? Was it hard for her to find a job?...and why?

Systemic Issues and SRI SRI is a tool to use the power of our investments to bring about systemic change SRI is a tool to use the power of our investments to bring about systemic change Deciding to do SRI is about recognizing the power we have to bring about the systemic change we want Deciding to do SRI is about recognizing the power we have to bring about the systemic change we want

Some SRI history Screening – deciding there are things from which you are unwilling to make money Screening – deciding there are things from which you are unwilling to make money Traditional sin stocks – alcohol, tobacco and gambling Traditional sin stocks – alcohol, tobacco and gambling TODAY: What are the systemic sins that affect persons, communities, the environment? What are our values, as persons, as institutions, as communities? TODAY: What are the systemic sins that affect persons, communities, the environment? What are our values, as persons, as institutions, as communities?

Shareholder Resolutions Shareholders can file shareholder resolutions on specific issues to address ways in which they want companies to change their programs, policies or practices.. Shareholders can file shareholder resolutions on specific issues to address ways in which they want companies to change their programs, policies or practices.. Shareholder Resolution Requirements: Shareholder Resolution Requirements: For any publicly traded US company Own at least $2,000 of stock Own at least $2,000 of stock For at least 12 continuous months For at least 12 continuous months

Example: South Africa Question: How to bring about the collapse of apartheid? Question: How to bring about the collapse of apartheid? Shareholders filed resolutions asking companies to divest from operations in South Africa Shareholders filed resolutions asking companies to divest from operations in South Africa Reasoning: Taxes paid to the South African government by foreign companies provided the majority of the funding for the apartheid government Reasoning: Taxes paid to the South African government by foreign companies provided the majority of the funding for the apartheid government

Supporting Other Resolutions Proxy Voting What is a proxy? What is a proxy? Process of Voting Process of Voting Sample issues: Sample issues:

Shareholder Advocacy: Working for Systemic Change Most of the shareholder work these days involves extensive and complicated dialogues and negotiations with corporations Most of the shareholder work these days involves extensive and complicated dialogues and negotiations with corporations Some corporations come to dialogues as a result of resolutions Some corporations come to dialogues as a result of resolutions Others respond to letters and telephone calls from shareholders Others respond to letters and telephone calls from shareholders

Why dialogue and negotiate? The issues are complicated The issues are complicated There are no simple answers There are no simple answers Shareholders must bring expertise to the negotiating table Shareholders must bring expertise to the negotiating table

International Coffee Crisis Coffee farmers and their families around the world were starving because of low, low coffee prices on the international market Coffee farmers and their families around the world were starving because of low, low coffee prices on the international market Shareholder resolution filed with P&G asked them to buy and sell Fair Trade certified coffee Shareholder resolution filed with P&G asked them to buy and sell Fair Trade certified coffee

Expertise needed for dialogue and negotiation Understanding the Fair Trade system Understanding the Fair Trade system Understanding the coffee system: how coffee gets from the farmer to the coffee cup Understanding the coffee system: how coffee gets from the farmer to the coffee cup Understanding the biology of shade grown coffee Understanding the biology of shade grown coffee Understanding the role of shade grown coffee in water stabilization and prevention of drought Understanding the role of shade grown coffee in water stabilization and prevention of drought Result: P&G now sells 4 types of Fair Trade Result: P&G now sells 4 types of Fair Trade certified coffee certified coffee

Issue: Human Rights and Labor Rights in Supply Chains Components in a Supply Chain Components in a Supply Chain Who benefits, who loses Who benefits, who loses Industries using supply chains Industries using supply chains

Issue: HIV/AIDS, Malaria, TB Work that has been done Work that has been done Shareholder resolutions Shareholder resolutions Assessment of corporate programs to supply medications Assessment of corporate programs to supply medications Assessment of corporate programs to suppy education Assessment of corporate programs to suppy education PROBLEM: the Security and Exchange Commission

Work to Write an New Resolution Linking it to previous work on supply chains Linking it to previous work on supply chains Discussions with NGOs in other countries Discussions with NGOs in other countries Discussions with NGOs in US Discussions with NGOs in US Discussions with health care providers in US and other countries Discussions with health care providers in US and other countries …the new idea: A Sustainability Resolution

Using Sustainability as the Key to Assessing HIV/AIDS, TB, Malaria Programs Key 1: SEC approves sustainability resolutions Key 1: SEC approves sustainability resolutions Key 2: Institutional shareholders vote FOR sustainability resolutions Key 2: Institutional shareholders vote FOR sustainability resolutions

Using Sustainability as the Key to Assessing HIV/AIDS, TB, Malaria Programs Key 3: Moves treatment for these diseases away from stigmatization and allows patients to be seen as functioning members of sustainable communities Key 3: Moves treatment for these diseases away from stigmatization and allows patients to be seen as functioning members of sustainable communities