Africana Plus
No59 February 2004.1
Justice and Peace
Ethical investments
"Blessed are those who hunger and
thirst for righteousness, for they will be filled." (Mt 5:6.)
Questions of
justice are more and more an object of Christian and
ecclesiastical reflection, especially for us, religious and
missionary communities, who advocate Justice and Peace as one of
our primary goals. How can we serve the financially poor without
being concerned by their poverty, especially if our communities
are implicated in the process of that impoverishment?
How could that be
possible? How can we make poorer the very people we are committed
to serve? One way is in investing their money badly.
For investments
are not innocuous. They can help create unjust conditions for
hundreds of thousands of people. Those who own shares in certain
large companies or multinationals, if these are irresponsible and
even sometimes completely lawless, share in their guilt by
supporting them with their investments.
Therefore
religious communities must strive more and more to make only
ethical investments. What is this about, and how can we find our
way in that financial jungle?
All religious
communities or non-profit organisations must see that their
capital, as well as the money others have placed with them, shows
a certain amount of growth. Keeping money in wool stockings or
burying it underground are no longer fashionable, and simply
having it in a current Bank account involves a loss on account of
inflation.
With the help of
financial advisors our communities must invest their own money
and the money entrusted to them by others, for example trust
funds, members personal property, gifts made to African missions,
so as:
-
to insure their security;
-
to fulfill their own needs and those of the members;
-
to meet their responsibility to others;
-
etc.
Consequently,
religious communities must do the same as pension funds, and
invest the money in Government' or Companies' bonds, or else buy
shares offered on the stock exchange. This involves technical
decisions that need skill and competency. One of the main duties
of investment committees (composed of missionaries and lay
specialized advisors) is to choose competent portfolio managers.
But their
responsibility goes further. When they buy stocks or even bonds
from companies, the communities become, although in a limited
way, co-owners of those companies and are therefore responsible
for their conduct. Complex as the problem can be, they have to
become acquainted with the company's policy and behaviour in
Canada or elsewhere in the world, and influence them as much as
possible, so that their activities be in line with the mission of
religious societies and their values, respect and promote human
rights, help development, and avoid investments in products that
are detrimental to health, create a dependency, or, favour
oppressive governments.
Our job is
enormous and our power of influencing large companies is minimal.
The tragedy would be to do nothing. On that question we must
remember that we cannot be neutral. Our stocks in these companies
make us co-owners; doing nothing would be tantamount to letting
those companies do what they want, with our tacit approval. But
to do something constructive we need to persevere and work with
others. So, what is our program?
1. The first
step consists in underlining constantly in our investment
committees the ethical aspects of those investments, and so
in sensitizing members to this reality. At first, many were only
concerned with their immediate profits, which they saw as the
bottom-line. There has been quite an evolution, these last years,
in their way of thinking. It is now acknowledged that the search
for an ethical solution in no way decreases profits. Being
ethically correct may even be profitable.
2. Secondly, it
is essential that we link up with other groups having the same
views. The Missionaries of Africa, (White Fathers,) have become
members of RRSE, (Regrouping to promote social responsibility
of companies) it was founded by a few members of ATIR (Association
of Treasurers of Religious Institutes) a few years ago. This
group defines its purpose in this way.
The mission
of this association is to promote justice and social
responsibility in enterprises, by using the collective financial
power of the members, especially in the domain of human rights,
of equitable dealings with workers, of the environment, and to
convince these companies to adopt benchmarks that are conform to
international standards.
To do this, RRSE
is using the right of the members to enter into discussion with
corporations in which the own stocks in order to influence their
policy. It also uses the voting right of the members to
vote in favour of shareholder resolutions promoting socially
responsible behaviour. Today, this group includes 16 religious
communities, 2 lay associations with a religious slant, plus 6
other individuals. Other interested groups and individuals attend
monthly meetings, but without, so far, having asked for formal
adhesion to the group.
Concretely,
what is the RRSE doing? Here are a few examples.
- Organizing
meetings with portfolio managers in order to make them aware of
our expectations in terms of Socially Responsible Investments.
- Keeping in touch
with GIR (Groupe Investissement Responsable); Michael Janzti
Research Associates ; KAIROS (group similar to RRSE, of churches
of English Canada); SHARE (of Vancouver); ICCR (USA); etc.
- Collaborating
with Universities (V.G. study of Business Guidelines of Canadian
Multinational Enterprises with Montreal and Laval Universities,
etc.)
- Writing to, or
calling meetings with representatives of large companies :
- For example, ALCAN, on its exploitation project of bauxite in
India, at the request of the Indian Churches.
- Power Corporation, owner of a large number off shares in
TotalFinalElf, a petrol company operating in Burma where a
Military Junta is in charge.
- Attending the
annual meeting of Tembec (a forestry exploitation company,) and
writing letters to forestry companies to encourage them to obtain
the certification of FSC (Forest Standard Certificate) for their
forest exploitation.
- Following the UN
report on the disastrous consequences of the involvement of
mining companies (of which 8 were Canadian) in the illegal
exploitation of natural resources in the Congo, writing to
Minister Graham to support the initiative taken by the "Table
de Concertation" for the Congo, asking Canada to verify the
conclusion of the UN committee, and also to regulate by law the
behaviour of Canadian companies operating abroad.
- Voting, with
other groups, in favour of a resolution of shareholders to invite
the Hudson Bay Co to make sure the rules of the World Labour
Organisation be respected by their foreign suppliers and to
insure independent verification. It is worth noting that, for the
first time in Canada, this shareholder resolution got 36.8 % of
the votes. The company has finally accepted to implement the
demands of that resolution.
3. Thirdly, the
White Fathers have hired two portfolio managers for their
investment ; with them, how free are they to fulfill their
ethical obligations?
With one of
them, they have had so far limited success. Nevertheless,
this manager had already established an ethical fund, (called
'Select'). The White Fathers have chosen to invest their money in
that Select Fund. Its only characteristic point is that it
eliminates buying shares in companies that make harmful products.
Its criteria of selection are :
- No company
making tobacco or alcohol products, or involved in gambling.
- No company
getting 10% or more of their annual income from the arms trade.
- No company in
which the rules of employment are markedly inferior to the norms
of each territory.
But, with that
portfolio manager, they have no say either in the choice of
companies to be eliminated or in the way their shares are voted
in the general assembly.
With their
other portfolio manager, the situation is quite different. In
answer to their request and that of other congregations, they
decided to establish a "fonds d'obligations et d'actions
canadiennes d'intégrité sociale." The White Fathers
were Founding Members, along with two other religious communities
of Ottawa. For that fund, a consulting committee has been set up,
whose role is to refine the investment policy of the fund and to
decide on how to vote for specific proxy resolutions.
That committee
meets since August 2002 about once every other month in Montreal
or in Ottawa. Its role is:
- To establish
and refine a screening policy ; what would be the criteria
for investing in some companies or rejecting others. They study a
number of companies and decide which one is admissible and which
one is not.
- To clarify
the question of voting by proxy. At the yearly meeting of all
corporations, shareholders can introduce proxy resolutions on
certain aspects of the company’s policy, for example on the
salaries of executives officers, or about human rights of
employees, the care of environments, etc. The committee will
study all these proxy resolutions and decide how to vote on each
one of them.
It is not likely
that such resolutions will gather a majority of votes, but they
can influence the company that cares for its public image, the
media may play them up and come back on them , as had happened
with "Talisman", a Canadian petrol company operating in
Sudan (it has since withdrawn its operations there). If a proxy
resolutions gets 3% or more of the votes, it must be brought back
at the next meeting; if 6% or more, shareholders will have to
vote on it again for a 3rd time.
This portfolio
manager has agreed to vote the shares of these congregations as
the committee directs him, either wholesale or one by one. He
also is willing, if the communities so desire, to give them their
proxies so that they can attend the annual meetings, and even
have an active role there.
The Missionaries
of Africa, (White Fathers,) as well as other religious orders
with whom they are working, do not pretend to save the world or
radically alter the financial policies of the big companies or
the multinational ones, but they do not intend to simply cross
their arms and let go, either. It is David against Goliath again.
Why not? The game is well worth the candle!
Alone, we
can do nothing. But all together, in a common faith, around our
Master, nothing is impossible.
Remember the story
of the rich Young Man in the Gospel. In spite of his good will
and the solution that Jesus gave him he refuses it and votes for
solitude. The apostles then asked Jesus, "Who can be saved?"
And Jesus answers, "It is impossible for man, but not for
God, for all is possible to God. (Mk 10:26.) But it is also
possible for those who accept God's guidance.
Michel
Fortin, W.F.