Coal and the iron and steel works that consumed it were, 125 years ago, the foundations of Andrew Carnegie’s fortune.(1) So, his life would seem unlikely to hold lessons for investors concerned about global warming. But it does.
Carnegie’s Causes
The Scottish immigrant had two great causes. Most recognize his name today in the US and UK for his philanthropic investments in vehicles offering opportunities for human betterment: Carnegie libraries, university scholarships, Carnegie Hall, Carnegie Mellon University, teacher pensions (TIAA-CREF), etc.
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On February 12, the Unitarian Universalist Association, Walden Asset Management and KLD sponsored a talk by Laura Berry, Executive Director of the Interfaith Center on Corporate Responsibility (ICCR).
I had the privilege of introducing her. These were my remarks.
In introducing my old friend, Laura Berry, I want to state the glaringly obvious: Without ICCR, SRI as we know it wouldn’t exist. It would not exist.
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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?
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Recently, on a radio show looking at oil company behavior and high gas prices, a senior economist at the American Petroleum Institute, an industry trade association, made the claim that oil companies are regulated not only by their customers, but also by those who hold stock in the companies. True.
The economist went a bit further to say that the federal government need not broaden oversight of oil company practices because those companies are already accountable to the American public, mostly because the American public are shareholders in oil companies. False.
While this oil industry economist’s opinion is a good reminder of the increasing role that sustainable investing and shareholder activism should play in the corporate accountability movement, it is also a reminder that a corporation needs to be accountable to all of its stakeholders, not just the ones who are fortunate enough to own shares of the company. This is particularly true when a business argument cannot be made for improved social responsibility.
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‘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.
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Update 1
SEC Chair, Christopher Cox, announced in testimony before the US House Committee on Financial Services that the SEC will issue new proxy rules before the next proxy season:
‘In connection with the Commission’s review of our proxy rules governing shareholder proposals, we have just completed a series of roundtables that considered, among other issues, the future role of technology in facilitating communications not only between shareholders and their company, but also directly among shareholders themselves. As we prepare to put new proxy rules in place in time for the next proxy season to address the implications of the court’s decision in AFSCME v. AIG, the Commission is also considering ways to facilitate greater online interaction among shareholders by removing any obstacles in the current rules, such as the ambiguity concerning whether use of an electronic shareholder forum could constitute a proxy solicitation.’
FinancialWeek.com reported Cox indicated the regulations (regs) would appear next month.
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For a couple of generations, commentators have described SRI as a three-legged stool:
• shareholder advocacy,
• screening and
• community investing
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