Jonathan Dee’s article, “A Toy Maker’s Conscience“, which appeared in the New York Times Magazine at the end of December is a must read.

First, it’s a generous yet clear-eyed portrait of Baruch College professor Prakash Sethi, a defining force in the movement for corporate accountability for more than 35 years.

His story is one of the great ones in our business, but it has gone, largely, unheralded. And Jonathan Dee has gotten both the story and Prof. Sethi’s voice right.

(read more…)

Time and time again, I see people on my side of the corporate social responsibility debate claim that “originally” corporations only came into existence for a “public purpose”.

Some go on to argue that we should reinstate that qualification. Others think we should assume the requirement still exists and impose higher levels of social responsibility on companies.

While history does not support the claim of a golden age when corporations came into being to serve a “public purpose”, it does not prevent society from imposing one now.

(read more…)

Coyright © 2007 by KLD Research & Analytics, Inc. All rights reserved.

Alicia H. Munnell, the Peter F. Drucker Professor of Management Science at Boston College, has asked, “Should Public Plans Engage in Social Investing?” in a briefing paper published by the Center for Retirement Research of which she is Director.¹ Her answer:

But even assuming that divestment is an effective mechanism to stop genocide and reduce terror risk and that state legislatures and pension fund boards are the right place to make foreign policy, the issue remains whether pension funds are an appropriate vehicle for implementing that policy. The answer seems unquestionably “no”.²

Is Prof. Munnell saying something outrageous here? If divestment by public pensions could halt genocide and “reduce terror risk”, they still shouldn’t do it?

(read more…)

Copyright © 2007 by KLD Research & Analytics, Inc. All rights reserved.

One of the under-reported heroes of the environmental cause is Patriarch Bartholomew I of the Eastern Orthodox Church. The story below reflects his efforts.

Before turning to the story, I’d like to quote some words of the Patriarch from his visit to the US ten years ago:

To commit a crime against the natural world is a sin. For humans to cause species to become extinct and to destroy the biological diversity of God’s creation, for humans to degrade the integrity of the Earth by causing changes in its climate, stripping the Earth of its natural forests, or destroying its wetlands … for humans to contaminate the Earth’s waters, its land, its air, and its life with poisonous substances — these are sins.¹

(read more…)

In the litany of failed technologies introduced by industry leaders, Sony’s Betamax—a videotape technology superior to its rival, VHS—probably leads the 20th century list.

Topping the 19th century list is Edison’s direct current (DC) electric transmission. At low levels, Westinghouse’s alternating current (AC) seemed a more efficient, safer means of transmitting power locally.

It may be that Edison had it right. DC allows transmission across greater distances with less power loss than AC. That may be crucial in bringing more wind and solar power on line. Suitable sites for wind and solar farms tend to be far away from the cities they’d supply. So says the July 26 Economist.

(read more…)

“Antitrust” is a word that has long outlived its usefulness. We need a new word – or set of words – that captures society’s imperative to regulate economic and social relations with its corporate creations.

Who recalls why we’re against trusts? At least beyond a vague, queasy feeling about collusion, hidden power, price fixing and political corruption…

In the US, business trusts arose in the 1880’s and 90’s to hold controlling interests in corporations. At that time, state laws existed that restricted ownership of corporations to in-state residents, limited the corporation’s ability to do business across state lines, and imposed capitalization restrictions. Since the trusts were not incorporated, however, these restrictions did not apply to them.

(read more…)

‘Precatory proposals’: this phrase from Purgatory has quickly entered the lexicon of those defending access to non-binding shareholder resolutions. Its users should wash their spell checkers out with soap.

‘Precatory proposals’, as I wrote a few weeks ago, is a phrase apparently invented by Leo E. Strine, Jr. Strine is a lecturer at Harvard Law School and a judge in Delaware, and he is no friend of non-binding resolutions. He’d like to see them abolished.

So, those who’ve adopted the phrase – which sounds very legal, very precise – should know what ‘precatory’ means and implies.

(read more…)

Why should companies engage KLD? What are KLD’s boundaries in talking with the companies we research about environmental, social and governance (ESG) issues? These questions – more than any others – come up when we talk to companies. They have come increasingly from the media and the public.

KLD’s position on engaging with companies has changed very little since its founding in 1988. We began by being clear about:

• whose interests we represented – social investors and their fiduciaries and agents;

(read more…)

Herewith from Fox News via London’s Sunday Telegraph the latest example of the exposure of inconsistences – at least in the eye of the beholder – between a foundation’s mission and its investments:

SHE PROVIDED the finale to yesterday’s Live Earth concerts, even writing a special song to mark the worldwide musical event. But instead of being lionised, Madonna found herself accused of hypocrisy after allegations that she has financial links to some of the world’s biggest polluters.

The Ray of Light Foundation, a charitable fund established by the star to support her favourite causes and named after one of her biggest hits, has $4.2 million … of shares in a string of companies including Alcoa, the American aluminium giant, the Ford Motor Company and Weyerhaeuser, an international forest products company. All have been criticised by environmentalists.

(read more…)

Coca-Cola CEO E. Neville Isdell has urged ‘more companies to get involved’ in protecting the environment. He spoke to a crowd of his peers at a meeting of the UN’s Global Compact in Geneva on July 7.

The Reuters report on his speech described his fervor with phrases such as ‘rattling the pulpit’ and ‘railing against his fellow executives to stand up and do more to protect the environment — particularly drinkable water’.

Exciting – and significant – as Isdell’s speech is, the Reuters story also captured the dilemma for corporations and their stakeholders in setting expectations – and limits – for what does not directly affect the corporate bottom line. Here is an excerpt from the article:

(read more…)