Having Faith
With the recent surge in faith-based environmentalism, it’s no wonder that religious entities are using their substantial financial clout to push for green changes in corporate business-as-usual. As a member of a congregation, you can have an impact by helping determine how endowments are being invested, and by suggesting shareholder resolutions to hold corporate entities accountable to ethical standards.
Making an Impact
When parishioner Jennifer Griffith took over as Chair of the Investment Committee at the Unitarian Universalist First Parish Church of Cambridge, Massachusetts, she inherited oversight of the church’s endowment. Her personal experience investing through the Domini Social Equity Fund led her to recommend that the congregation follow similar socially and environmentally responsible criteria for investing its endowment funds.
Griffith also wanted to get the congregation involved in voting on and even proposing shareholder resolutions, whereby a group of investors suggests that a given corporation put a vote before all shareholders regarding a specific action or policy change. With the heartfelt approval of the congregation, First Parish switched to a money management firm experienced in socially responsible investing (SRI), and has never looked back.
“Our church now has the opportunity to act proactively and develop our own issue focus and shareholder resolutions,” says Griffith. “This is up to the church as a whole and we are just beginning the process of educating the congregation.” Griffith reports happily that returns on the endowment’s investments are better than ever today.
Calling Dow to Task
When the nuns at Detroit’s Sisters of Mercy chapter discovered that pesticides produced by one of their endowment’s stock portfolio companies, Dow Chemical, were causing health problems in children, they decided to use their position as shareholders to call attention to the issue. “They must be held accountable for this chemical trespass,” says Sister Valerie Heinonen.
Heinonen and the other sisters filed a resolution asking for a vote by Dow’s shareholders on whether the company should phase out production and sale of the harmful pesticides. After some legal wrangling, Dow agreed to put the proposal up for a vote. In the end, thousands of Dow shareholders, representing about five percent of the company’s outstanding shares, voted for the Sisters’ proposal. While they lost the vote, Heinonen feels confident that this shareholder advocacy enlightened even dissenters as to the size of the problem. And the sisters hope that through similar efforts moving forward, they can eventually convince Dow to stop spreading toxins domestically and beyond.
Going Institutional
The epicenter of the faith-based SRI movement is the nonprofit Interfaith Center on Corporate Responsibility (ICCR), a membership organization made up of 275 faith-based institutional investors with a combined portfolio value estimated at $110 billion. Each year, ICCR member groups sponsor more than 100 shareholder resolutions on major social and environmental issues.
Leslie Lowe, ICCR’s environment program director, is particularly excited about progress the organization has made on the global warming front. “Five of the largest carbon dioxide (CO2) emitters in the country have agreed to provide the reports we asked them for regarding the competitive, regulatory and reputation-based pressures they are facing as a result of global warming,” says Lowe. “As investors, we have a right to know how these companies are positioned to deal with challenges coming their way as a result of global warming, from the potential reintroduction of the McCain-Lieberman climate change legislation to the decision by Vermont to off-set emissions that could create a Day After Tomorrow scenario.”
While Lowe is encouraged by ICCR’s success in extracting corporate reports, she acknowledges that it is only a small part of the equation. ICCR is also working on its portfolio companies to behave proactively by reducing CO2 emissions to sustainable levels.
Lowe also reports that shareholder advocacy by ICCR and its members helped spur the retreat by Monsanto on the production and distribution of genetically engineered (GE) foods. “We have been putting out information for years on the risks from the company’s GE products,” she explains, citing Monsanto’s retreat as a sign of the growing power of shareholders bent on doing the right thing.
Getting started in faith-based SRI investing is as simple as finding out how congregational funds are being invested and then advocating for improvements. The national denomination offices can be helpful in suggesting resources and providing social responsibility guidelines. Indeed, with so many examples and resources at their fingertips, now’s the time to help steer congregational investments in the right direction.