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Understanding the Power of Our Money An 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.
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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
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
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
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?
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?
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
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?
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
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
Supporting Other ResolutionsProxy Voting • What is a proxy? • Process of Voting • Sample issues:
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
Why dialogue and negotiate? • The issues are complicated • There are no simple answers • Shareholders must bring expertise to the negotiating table
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
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
Issue: Human Rights and Labor Rights in Supply Chains • Components in a Supply Chain • Who benefits, who loses • Industries using supply chains
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
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
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
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