RiskMetrics ESG Insight Blog » Social Investors Saw it Coming: ICCR and Michael Jantzi Take the Long View of the Financial Crisis

Social Investors Saw it Coming: ICCR and Michael Jantzi Take the Long View of the Financial Crisis

By: Alan Petrillo | Wednesday, October 15th, 2008

The global financial crisis has happened fast, and investors and governments have struggled to keep up. Not everyone has been surprised by the events of recent weeks, however. Some members of the socially responsible investment (SRI) community operated an “early warning system” for investors.

No, they haven’t said “I told you so.”

“‘Prophetic’ Religious Groups Sounded Subprime Loan Alarm 15 Years Ago,” says the Interfaith Center for Corporate Responsibility. A September release from ICCR details how “as early as 1993, ICCR members were filing resolutions – six just that year – to more closely regulate subprime mortgages.”

Community development groups have long advocated for and created responsible subprime loans, and they’ve also decried the use of predatory tactics by some banks. Lenders who’ve stayed true to core SRI values – especially transparency and concern for all stakeholders, including subprime borrowers – have fared better than most.

For more perspective, see “The Market Crisis and its Impact on Socially Responsible Investing.” Michael Jantzi, leader of Canadian SRI firm Jantzi Research, describes how “the current financial debacle has shone the spotlight on the dangers of short-term thinking.”

Mr. Jantzi writes that hedge funds have become a “dominant force” in the financial markets. He explains how their investment approach is built on opacity, complexity, and short-term returns – “and very little interest in ESG performance.”

As current events discredit this philosophy, Mr. Jantzi sees cause for optimism:

“I do believe that once we start putting this latest fiasco behind us the soundness of the SRI community’s core methodologies and practices will gain increased credibility in mainstream circles.”

1 Comment »

Three comments. First, ‘early warning systems’ need to be reenforced by ‘early learning systems’ as tobacco has long taught. Regretfully those who warn are not those who need to learn. Why learn (change) when you are the sole beneficiary.
Second, ‘hedge funds’ are well named. Hedges have always served to conceal our behaviour from those next door. I almost said ‘neighbours’.
Third, persistent anti-social behaviour behind dark glass and lace currents makes nonsense of advocacy of ‘transparency’ and ‘accountability’. Those involved in this anti-social behanviour know and defend what they are doing and why they are so acting, they have no inclination to learn (change). They are already self-regulating.

Comment by T Welsh — October 22, 2008 @ 5:48 am

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Social Investors Saw it Coming: ICCR and Michael Jantzi Take the Long View of the Financial Crisis

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