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Understanding the Power of Our Money An Introduction to SRI (Socially Responsible Investing)

This book explores the concept of Socially Responsible Investing (SRI) and how it can be used to bring about systemic change. It covers the history of SRI, shareholder resolutions, proxy voting, and shareholder advocacy. It also provides real-world examples of how SRI has been used to address issues such as human rights, labor rights, and healthcare in supply chains.

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Understanding the Power of Our Money An Introduction to SRI (Socially Responsible Investing)

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  1. Understanding the Power of Our MoneyAn Introduction to SRI(Socially Responsible Investing) Sister Ruth Rosenbaum, TC, PhD Executive Director CREA: Center for Reflection, Education and Action PO Box 2507 TEL: 860.527.0455 Hartford, CT 06146-2507 www.crea.org Email: crea@crea.org

  2. A Story from my last Foundation Conference A mother called A child was in danger The CSA HS agency she called responded Immediately…and with a sense of urgency Protect the child Assist the mother

  3. Analyzing the situation: • She knew there was someone to call • The response was not just for the child • But also for the mother In many other places, the response would have been only to assist the child Response of charity

  4. Response of Advocacy • Assist the mother • Not only to provide the needed food • But also to make sure the mother was not charged with abandoning her child • AIM: Keep the mother and child together • Question: How to provide what they need?

  5. Systemic Questions • Where did the mother work? • What were her wages? Did she earn a sustainable living wage? • Was she able to work full-time or part-time? • Did she receive benefits? • Was it hard for her to find a job?...and why?

  6. Systemic Issues and SRI • SRI is a tool to use the power of our investments to bring about systemic change • Deciding to do SRI is about recognizing the power we have to bring about the systemic change we want

  7. Some SRI history • Screening – deciding there are things from which you are unwilling to make money • Traditional “sin stocks” – alcohol, tobacco and gambling • TODAY: What are the systemic “sins” that affect persons, communities, the environment? What are our values, as persons, as institutions, as communities?

  8. Shareholder Resolutions • Shareholders can file shareholder resolutions on specific issues to address ways in which they want companies to change their programs, policies or practices.. • Shareholder Resolution Requirements: For any publicly traded US company • Own at least $2,000 of stock • For at least 12 continuous months

  9. Example: South Africa • Question: How to bring about the collapse of apartheid? • Shareholders filed resolutions asking companies to divest from operations in South Africa • Reasoning: Taxes paid to the South African government by foreign companies provided the majority of the funding for the apartheid government

  10. Supporting Other ResolutionsProxy Voting • What is a proxy? • Process of Voting • Sample issues:

  11. Shareholder Advocacy: Working for Systemic Change • Most of the shareholder work these days involves extensive and complicated dialogues and negotiations with corporations • Some corporations come to dialogues as a result of resolutions • Others respond to letters and telephone calls from shareholders

  12. Why dialogue and negotiate? • The issues are complicated • There are no simple answers • Shareholders must bring expertise to the negotiating table

  13. International Coffee Crisis • Coffee farmers and their families around the world were starving because of low, low coffee prices on the international market • Shareholder resolution filed with P&G asked them to buy and sell Fair Trade certified coffee

  14. Expertise needed for dialogue and negotiation • Understanding the Fair Trade system • Understanding the coffee system: how coffee gets from the farmer to the coffee cup • Understanding the biology of shade grown coffee • Understanding the role of shade grown coffee in water stabilization and prevention of drought • Result: P&G now sells 4 types of Fair Trade certified coffee

  15. Issue: Human Rights and Labor Rights in Supply Chains • Components in a Supply Chain • Who benefits, who loses • Industries using supply chains

  16. Issue: HIV/AIDS, Malaria, TB • Work that has been done • Shareholder resolutions • Assessment of corporate programs to supply medications • Assessment of corporate programs to suppy education PROBLEM: the Security and Exchange Commission

  17. Work to Write an New Resolution • Linking it to previous work on supply chains • Discussions with NGOs in other countries • Discussions with NGOs in US • Discussions with health care providers in US and other countries …the new idea: A Sustainability Resolution

  18. Using Sustainability as the Key to Assessing HIV/AIDS, TB, Malaria Programs • Key 1: SEC approves sustainability resolutions • Key 2: Institutional shareholders vote FOR sustainability resolutions

  19. Using Sustainability as the Key to Assessing HIV/AIDS, TB, Malaria Programs • Key 3: Moves treatment for these diseases away from stigmatization and allows patients to be seen as functioning members of sustainable communities

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