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.

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