A Case for Hope: Interfaith Center on Corporate Responsibility

 

New York City, November 2, 2000

 

Amy Domini served on the Governing Board of the Interfaith Center on Corporate Responsiblity from 1985 through 1994. ICCR is a federation of faith institutions that take the responsibility of stewardship seriously. Members enter into dialogue with corporations on a broad range of issues relating to human dignity. The organization traces its history to the efforts of the Episcopal Church to assist their Anglican sister Church in South Africa. In 1971, the Presiding Bishop of the Episcopal Church travelled to the annual meeting of General Motors, then the largest employer in South Africa, and asked that company to pull out. Soon, the Peace and Justice officers of other faiths joined the effort and ICCR was born.

 

Thank you. It is a real honor to have this opportunity to speak here tonight. Before beginning, I'd just like to acknowledge that in this room are representatives from three major communities: the corporate community, the asset management community, and the religious community. It is a tremendous testimonial to the Interfaith Center on Corporate Responsibility that this coalition building takes place each year. And I particularly want to honor ICCR members for your faith leadership, your unflagging dedication to the cause of human dignity, your unflinching resolve to use every tool at your disposal to fight for decency, kindness, and a livable planet. You in this room have been my harshest critics, my mentors, my staunchest supporters and my truest lodestone. You make possible a better life for the millions upon millions of voiceless people you serve.

 

Cowboy shows were still popular when I was growing up. One scene was replayed in almost every episode. It had variations, but always the essential elements remained. Generally there was a vulnerable person or family, often a grandmother, mother, and three young children in a wagon or stagecoach being drawn by two or four strong horses. Something would cause the horses to stampede without purpose. This spelled disaster for the helpless family hugging each other in terror. Cowboy Bob would gallop up along side the lead horse and, in a magnificent display of heroic athletic ability, manage to either pull the beast to a more moderate pace or actually mount it and steer the wagon to safety.

 

Today the financial engine of the world is engaged in a stampede, carrying the world's population with it. We do not know exactly where this ride will end but we know that the lack of purpose spells disaster for our helpless family of humankind. And who is Cowboy Bob? Is he government? No, government fiscal and monetary policy - particularly in developing nations - is increasingly subject to the dictates of the world financial system. Is he the consumer? No, consumers' tastes preferences and trends continue to be manipulated by corporate advertising and media. Is he benign management at multinational corporations? No, corporate management has come under the relentless pressure of financial institutions to enhance shareholder returns.

 

In my view, there is only one possible Cowboy Bob, an investor class. Without an investor class that is able to adroitly mount, or at least steer the thundering forces of finance, and thereby commerce, disaster is certain.

 

This evening I'd like to build a case for hope. For I sense that we are at a tipping point in history, and that socially responsible investing - that is, an enlightened investor class - has a pivotal role to play in it. How? At the macro level, social investors harness, and can reform, our planet's strongest engine: the world's financial system. At the micro level, we foster a sense of individual responsibility that will be absolutely critical if we are to build the sort of civil society that can ever vigilantly protect our liberties.

 

The Domini 400 Social Index celebrated its 10th anniversary in May and the Domini Social Equity Fund will turn 10 years old in June. These anniversary dates are interesting, and fortuitous, because they allow me to reflect upon how much socially responsible investing has accomplished over the final decade of the 20th century and to lay out what I believe we can accomplish during the ten years ahead.

 

SRI has taken hold globally. Four funds in Japan, one in Malaysia, thirty in Canada, one in Brazil, fourteen in Australia, seven in Spain, three in Italy, two in Morocco, over forty in England, and so on in at least a dozen other countries. The industry has exploded in size and credibility and impact. The notion of corporate social responsibility has become accepted and yet I feel great urgency.

 

We have grown. We have entered the mainstream; we have altered the vocabulary; we have even had a measurable impact, but we have not altered the course of human events.

 

We find ourselves on a wagon galloping to disaster: a widening gap between rich and poor, unsustainable population growth, rising temperatures, falling water tables, shrinking cropland per person, collapsing fisheries, decimated forests, the loss of plant and animal species and of natural ecosystems. Some 24,000 people per day die of hunger-related causes, and three quarters of these are children. An average African family consumes 20% less than they did 25 years ago.

 

The wealth transfer that we Americans have enjoyed is not just us getting richer and the rest of the world not getting richer. We have reduced household consumption in the rest of the world. Meanwhile we've deluged poor nations with armaments and the man-made scarcities that now play out against the backdrop of religious, ethnic, racial and tribal enmities, and threaten to send entire regions, even continents, into the abyss of civil war and slaughter while we profit from the sales.

 

There is no "they" creating the conditions of global disaster. We are the problem. Corporations increasingly rule the world. They are, however, only loyal henchmen. They serve their lord and master.

 

The problem lies not with corporations but with the world's financial system. We investors benefit from these calamitous things that I've been speaking of and we insist that corporations continue doing them, continue the assault. As owners we insist that management serve a single god, the shareholder's wallet. But what good is a fat wallet if you cannot breathe, if your children are afraid to walk down the sidewalks of our great cities? And now we are exporting that value globally.

 

Social investors have been asleep at the switch. We have stood aside, ignoring meetings shaping the new and modernized rules for investing and corporate governance now being written for dozens of nations. The result is that the OECD principles of corporate governance contains only the most general language suggesting some mechanism for shareholder rights, not coming close to guaranteeing an American-style shareholder voice in stakeholder impact. When the heads of securities commissions from around the world met in Australia last June, no SRI voice was heard, but three currency hedge fund managers were on the agenda. This is an outrage, and a failing on my own part.

 

In this land, we have child labor laws, the 40-hour week, minimum wage laws, the right to collective bargaining, the Sherman Antitrust Act, unemployment insurance, workers compensation insurance, social security and Medicare, pension protections, the clean air act, clean water act and the EPA. Will we allow these to be lost through the mere process of globalization? Will child labor and minimum wage laws, collective bargaining rights and environmental protections be rendered meaningless by the flight of capital to nations with less stable political and judicial institutions? If we are to export contract rights, corporate governance standards, property rights and intellectual property protections globally, as we should, should we not also take care to export human rights, shareholder rights, labor rights and environmental protections as well? Is it not our responsibility to do so? It will not happen unless socially responsible investors enter the policy debate.

 

As we become, for the first time in history, a global economy, cannot we also become a global community? SRI must bring structural change by operating within the belly of the beast. We in this room must be Cowboy Bob.

 

But a future that holds human dignity and environmental sustainability as goals cannot be realized unless civil society is engaged. And a functional civil society requires individuals who understand the personal responsibility each of us carries.

 

It can be done. It has been done. Look at my mother. She is 75. She and her generation drive us crazy. They smooth out their tin foil for re-use. After Christmas they tear the fronts off the pretty cards to use as gift tags the following year. They compost kitchen waste. They carry grocery bags to the supermarket, save old ribbons, string, buttons, and wrapping paper. They mend their clothes as they tear.

 

My mother is a product of World War II. Her father and brothers were out there fighting and dying. The least she could do was conserve our nation's resources, and she has never unlearned that. Fifty years later, we must retrain whole populations to understand that there is a war going on and that only by our taking individual responsibility can we save ourselves.

 

In his book, Culture and Consumption, Canadian anthropologist Grant McCracken writes of the concept of a "departure purchase", a purchase that marks the beginning of a redefinition of self. When a 24-year-old woman cuts her hair, she may be marking her transformation from graduate student to young professional. She may next purchase a suit, a briefcase, a subscription to business week. Sometimes the transformation is not intentional; sometimes simple acquisition of a good sets this transformation in process. French enlightenment philosopher, Denis Diderot wrote an essay, "Regrets on Parting with My Old Dressing Gown." In it the author bemoans the sorry state of his life, the result of a gift of an elegant dressing gown from a well-meaning friend. The dressing gown had been so fine that he'd felt his desk and drapes were a bit shabby and had replaced them. This led to an updating of cushions, an assessment of the lamps, with replacements resulting, removal of the shabbier bric-a-brac until he himself felt unwelcome in his own study.

 

It may seem a silly story but sometimes a tree planted in Brooklyn can transform a neighborhood. In fact, consumption has been the greatest social change agent on the planet. It has accomplished this by affecting behavior patterns of individuals, at the individual level, in such a way that whole societies are redefined, transformed.

 

I believe that an ethical investment is just such a departure purchase. The investor has taken a small step - little suspecting that he or she has begun a journey of personal redefinition. But by making this purchase the investor subtly but fundamentally changes. At some level this person is no longer one of the weak, one of those doing nothing, buffeted by forces beyond their control. Like my mother, this is an individual who will take small steps, will shop more deliberately, vote more deliberately, read the newspapers differently, and be a more engaged citizen. From such things healthy societies are made.

 

Ten years ago the SRI industry posited that the way you invest could make money and make a difference. Ten years ago the Domini 400 Social Index began to chug along uphill, against overwhelming odds. Ten years ago, the majority in South Africa had no vote. Ten years ago I traveled to northern Ireland, a guest of the Anglican Church of Ireland, and heard Catholic labor leaders, nuns and government officials tell me to back off, there was no sense to the McBride principles. And as I left each room, they whispered at me, passed me notes -- "keep it up. We desperately need your help." Ten years ago no major company had agreed to comprehensive environmental reporting.

 

And ten years ago the dark side to globalization started to become clear. For me the moment arrived at an ICCR late night party where Seamus Finn began grousing about baseballs and how they should mean something. Weren't they as American as apple pie? What was wrong with the world? He'd been to a baseball manufacturing facility operating in Haiti. What he'd seen was wrong, immoral, not befitting of the symbol of all that is fine in this nation.

 

Now we know that we can chug up that mountain. Over the next ten years, our job will be to change the rules…to build a world where human dignity and environmental sustainability not only hold equal sway with profits, but where profit itself is a tool to deliver these, along with desired goods and services.

 

We are at a flex point in history. This is a small planet and our time is short. We are weary of suffering and injustice. We must act now if we are to save God's green earth and her children, for generations to come.

 

We have the tools; we have the structure; and we cannot afford to fail.

 

Like man in Michelangelo's magnificent fresco on the Sistine Chapel's ceiling, humanity reclines in lazy comfort as God stretches yearningly towards us, willing us to but raise our dropped finger only an inch or less to touch his (or her) own. It would take so little effort to touch that holy place. We have only to integrate this goal, a standard of decency, into the institutions we build and into the lives we lead.

 

 

The Domini Funds are not insured and are subject to market risks. Investment return, principal value, and yield will fluctuate so that an investor’s shares when redeemed may be worth more or less than their original cost. You may lose money.

 

On November 30, 2006, the Domini Social Equity Fund, formerly an index fund, transitioned to an active management strategy. The Fund does not invest in the Domini 400 Social Index.