Social investors have long been interested in executive compensation. The pay packages of CEOs occasionally attract attention from the mainstream press, too, and the June 12 issue of The Economist weighs in on the issue.

Three different articles consider executive pay, and they follow different paths to the same general conclusion. Yes, the authors agree, it’s possible that companies overpay their executives – especially in the U.S. – but it’s hard to say how much compensation is too much. The first article, “Pay Attention,” includes this sweeping statement:

“It is near impossible, of course, to determine the correct absolute level of executive pay.”

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The Sustainable Endowment Institute (SEI) recently released its College Sustainability Report Card. According to its Executive Summary, the Report Card “seeks to encourage sustainability as a priority in college operations and endowment investment practices by offering independent yearly assessments of progress.”

Institutions of higher education have played a significant role in SRI at least since the South African divestment movement of the 1980s. The Report Card examines both the investment practices of these schools and the sustainability of core university operations.

SEI finds that “the level of campus sustainability initiatives far outpaces that of endowment sustainability activity.” Responsible food-service and recycling practices, for example, earned “A” grades for 29% of schools. Only 4% of colleges achieved the same grade for their “Endowment Transparency.”

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One of the first socially responsible investment (SRI) screens excluded weapons suppliers from investors’ portfolios; today, however, publicly traded companies don’t just build weapons – they fight wars. Privatized Military Operations (PMO) have been integrated into American missions in Iraq, Afghanistan, and other less-visible theaters worldwide.

Researchers at the Industrial College of the Armed Forces have produced a fascinating in-depth review of PMO in modern warfare. The report, released in 2007, highlights the extent of PMO involvement in the Iraq war. For example, the ratio of private contract employees to American troops in Iraq is 1 to 1.5.

Private contractors now provide services that have traditionally been the responsibility of American soldiers. Some of these are support tasks, such as maintaining barracks and running kitchens. A more worrisome trend is PMO contractors’ performance of core combat functions: building overseas bases, maintaining weapons, and providing security details.

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German footwear producer Adidas has recently begun to disclose its global supplier list publicly.

The company followed a number of other footwear and apparel companies in doing so: in mid-2005, Nike became the first major footwear company to publish a list of all of its suppliers globally on its website, after labor rights groups had pressured the company (and its peers) for several years on this issue. Levi Strauss started publishing its list later that year.

Timberland states in the FAQ section of its website that it releases the names of its supplier factories to “code of conduct specialists and other locally-based NGOs” with which it works. Puma’s website FAQ section says that its list of suppliers is publicly available on the website of the Fair Labor Association (to which Puma provides a link), but after looking on FLA’s site for several minutes, I gave up.

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On Tuesday August 7th, I joined members of KLD’s staff and summer interns to pay a visit to the Boston College Center for Corporate Citizenship. There, we enjoyed presentations given about the Center and its affiliate, The Institute for Responsible Investment (IRI).

The Center and IRI are closely aligned with the mission of KLD. Both are doing some wonderful work and research in the areas of socially responsible investing and corporate responsibility. IRI is working on projects ranging from emerging markets to responsible property investment. In addition, IRI is wrapping up a study on non-financial reporting and the findings should be available in the first quarter of 2008. For more information about the Center and the IRI visit http://www.bcccc.net/.

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;

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I just skimmed this report in preparation for the OnValues/Who Cares Wins conference I’m attending this week, which is focusing on emerging market investment.

The report is from Association for Sustainable & Responsible Investment in Asia (ASrIA), and it’s on the lack of disclosure of environmental, social and governance (ESG) factors by Asian companies listing on the Hong Kong Stock Exchange. In addition to being a good overview, the report gives some idea of the proxy ESG indicators one can use when looking at companies that disclose very little information, such as staff turnover, expenditure on pollution control equipment, etc.

Some things I read just mystify me.

FinancialNews-US.com reported on June 27 that former US Vice President Dan Quayle had joined the board of Heckmann Corp., which it described as a ‘blank check’ company. It continued:

‘Blank [check] companies, which have no defined business plan and are set up to buy an unspecified company or assets, have become increasingly popular in the last couple of years, but have been controversial because investors do not know what they are buying.’

Controversial?! A number of other words came to mind.

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