Some change happens very quickly. Occasionally the thing that has been accepted for generations disappears very quickly. I’m too young to remember the women’s struggle to vote, but as I look back at the history of the vote, it seems that once it really began, it happened right away.
I’m not too young to remember the birth of feminism. I grew up believing that I’d probably be a mom, but I might teach kindergarten. There weren’t really any sports for me to play, although I did get into a synchronized swimming program in high school. When I graduated from college, I no longer wanted to teach kindergarten and I wasn’t married so I went to typing school. But the change came, and it came in a big hurry. Five years later, I was supporting myself as a financial advisor, teaching investment courses and writing about ethical investing.
I’m not too young to remember the end of smoking. When I was pregnant with my son, who’s now 30, the small office I shared with four others was always full of smoke. In fact after lunch, it was full of cigar smoke. It never even occurred to me that I might ask my fellow workers to show some consideration to a pregnant and uncomfortable woman. But once the ball got rolling, smoking was banned in setting after setting.
The process of long-term sustained change seems to involve a few vital components. First, one needs a countervailing thesis. Women are as much citizens as men are. Smoking is unpleasant and harmful to non-smokers. Next, you need some people to get really, really worked up about it. This vanguard has to be brave about confronting people who disagree with them. After that, the notion is aided by righteousness. Only a fool would consider his wife, mother, daughter or sister incapable of thought. Only a selfish jerk would poison his or her family and friends while poisoning one’s own body. Then comes the toboggan slide, when laws, social norms and manners all come together to assist, rushing to embrace the new understanding.
Recently I got a wedding invitation in the mail. Tommy and Brian were getting married. Because Tommy and Brian live in Massachusetts, this same-sex couple was granted access to the institution of marriage, but in most of the U.S. they would not have had the option. Still, it feels a lot like the “smoking is harmful” days. Polls tell us that Americans in every age group don’t care about sexual orientation and that all but the oldest Americans believe that granting the right to marry to all is long overdue. In fact, I recently heard openly gay former U.S. Representative Barney Frank describe the right to marry as enjoying a tsunami of support, not just on the Eastern seaboard, not just across America, but increasingly, across Europe.
It feels like such a short time ago that I myself did not see any reason to support homosexual marriage. My friend and colleague in the field of responsible investing, Julie Goodridge, sued for the right to marry. I thought it was an awful lot of work and loss of privacy, and there wasn’t anything wrong with living together. But she had been denied the presence of her spouse in the delivery room, and that seemed wrong. She was also denied the benefit of marriage in filing her tax returns, obtaining health care, retirement planning and estate planning. Nobody really cared that Hilary and she were partners, but everyone wanted to deny them the most natural results. So I came around. They won that case. And now Tommy and Brian are married.
These things fill me with great hope. I know in my core that important and positive change can occur. What will be next? Will we use the power of common sense to get our proliferating automatic weapons out of the hands of killers? Will we use it to get help, rather than prison sentences, for the addicted? Will we seek systemic means of providing the highest quality education, food, shelter and health care to our population? There is such a thing as the power of the people, and when you see it used, it is thrilling.
Apple has received significant and persistent media attention for its relationship with Foxconn*, a key manufacturer for the global electronics industry. This attention came to a head early in 2012 with a lengthy New York Times story about working conditions at Foxconn facilities in China supplying products for Apple.
Domini has been paying close attention to working conditions in Apple’s supply chain for several years, and has played an instrumental role in moving the company in the right direction. In 2005, we convinced Apple to adopt its first code of conduct, setting strong standards for its suppliers to follow to protect the basic rights of workers manufacturing Apple products. The code was adopted shortly before the company’s first sweatshop controversy, which also related to Foxconn. Shortly thereafter, the company began monitoring its supply chain and producing transparent annual reports about these efforts and working conditions in these facilities. We have been meeting with the company at least annually since the adoption of their code. Domini was also a lead drafter and coordinator of an investor statement in response to worker suicides at a Foxconn facility in 2010.
This year, Apple made two significant announcements – it released the names of its major suppliers, and joined the Fair Labor Association (FLA), an organization providing thorough and transparent audits of factories for many apparel companies, such as Nike and Adidas. Apple is the first company in its industry to join the FLA. The FLA conducted thorough audits of Foxconn on Apple’s behalf, which were then released to the public, resulting in additional media coverage. We organized an investor call with Apple in April to discuss the FLA’s findings and to receive an update on the company’s supply chain efforts. The FLA audits revealed a number of significant, recurring problems. We discussed Apple’s plans to address these problems, and intend to regroup with Apple later in the year to assess progress.
In response to the ongoing violent crackdown against civilian protestors by the Syrian government, Domini has joined a group of institutional investors calling on publicly traded oil companies to stop fueling the violence. The group of investors — the Conflict Risk Network (CRN) — has called on the oil companies to either halt operations in the country or at least issue statements to the Syrian regime condemning the violence.
In February, we signed a joint letter issued by CRN to oil and gas companies operating in Libya. CRN offered a proposal for a joint escrow account to hold payments that firms would otherwise make to Qaddafi or the National Oil Company. In August, we participated in a letter to Italian oil firm Saras S.p.A., urging it to ensure its products do not facilitate violence committed by Muammar Qaddafi’s regime in Libya.
Domini is a founding member of the Conflict Risk Network, and a member of the organization’s advisory board. CRN seeks to leverage the more than $500 billion in combined assets of its institutional investor members to address mass atrocities and avoid genocide in conflict zones around the world through in-depth research on corporate activity in these regions and direct engagement with companies.
- CRN Press Release on Libya
- CRN Press Release on letter to Italian oil company, Saras
- Investor Letter to Saras
Saras S.p.A is not currently approved for investment by the Domini Funds.
From the Social Sustainability Resource Guide, published by the Interfaith Center on Corporate Responsibility (June 2011).
In August 2010, Domini Social Investments, announced that it had reached an agreement with Nucor, the largest steel producer in the United States, to address the company’s exposure to slavery and illegal deforestation in its Brazilian supply chain. The agreement followed three years of dialogue with the company...
Oral and written testimony to House Committee on Financial Services' subcommittee on International Monetary Policy and Trade: "Investments Tied to Genocide: Sudan Divestment and Beyond" (November 30, 2010). Read a transcript of the hearing on the website of the House Committee on Financial Services.
When your investment dollars buy shares in one company and avoid another, does it really make a difference?
After three years of dialogue with investors, Toyota Motor, the world’s largest automaker, took an important step to distance itself from the brutal military regime in Burma. That step was the direct result of investors who care about how they make money.
To serve responsible investors, Domini uses a comprehensive set of social and environmental standards to select its investments. To apply these standards, our analysts must dig deeply to uncover information many companies would prefer remained in the dark. While researching Toyota Motor in 2006, Shin Furuya, one of Domini’s lead research analysts, discovered that Toyota Tsusho, the company’s major trading partner, was in partnership with the Burmese regime to sell motorcycles, light trucks and cars. The regime tightly restricts the domestic market for these vehicles to its wealthiest citizens, and those with military connections. This information was uncovered in Japanese, and was apparently unknown to both human rights activists and investors.
Based on these factors, and several other concerns, Domini determined that Toyota Motor did not meet our standards for investment. We didn’t buy their stock, but we didn’t let them off the hook. We shared our findings and, together with other investors, expressed our concerns to the company. At a 2007 meeting of the Japan Society, Shin and a colleague from Trillium Asset Management hand-delivered a letter to the chairman of Toyota Motor (Our letter is posted to the website of the Business and Human Rights Resource Centre)
At first, Toyota Motor said that it did not control its trading partner and was not responsible for its actions. Our research, however, showed otherwise. Toyota Motor, Shin found, owned more than 20% of Toyota Tsusho, was Toyota Tsusho’s biggest customer, and had several representatives on its board of directors.
Working with Trillium, Boston Common Asset Management and the Interfaith Center on Corporate Responsibility, we continued to pursue dialogue with the company. Gradually, Toyota’s position changed.
In March 2008, a Toyota official wrote: “I would like to reassure you that Toyota shares your concerns about the human rights situation in Burma.” That August, after three years of dialogue, Toyota Motor revealed that its trading partner had ended its joint venture with the government of Burma.
In November 2010, the Burmese regime intends to hold its first national elections in 20 years. Aung San Suu Kyi, the winner of the 1990 elections, remains under house arrest, and will not appear on the ballot. The regime holds about 2,100 other political prisoners.
Domini’s research process, grounded in our Global Investment Standards, is based on protection of the environment and fundamental human dignity. Toyota Motor’s action, prompted by our concerns, sends an important message that the violent suppression of democracy in Burma is unacceptable.
Read more below:
Read press release issued by investor coalition
Read coverage in Reuters and Socialfunds.com
An interview on engagement between social investors and Cisco Systems regarding human rights in China (China Rights Forum, July 2010)
Domini officials contributed two chapters to Finance for a Better World: The Shift Toward Sustainability, a new book on sustainable investing published by Palgrave Macmillan. The two chapters focus on how socially responsible investing can address short-term thinking in our financial markets and improve corporate human rights performance, respectively.
Steve Lydenberg, Domini's Chief Investment Officer, argues that socially responsible investing can remedy the short-term thinking that has plagued our financial markets. "An excessive focus on short-term profits has various detrimental effects," writes Lydenberg. "It causes corporate managers to misallocate assets. It introduces dangerous volatility into financial markets. It means society must divert productive resources to repairing environmental and social damage done in the headlong pursuit of profits." Lydenberg suggests that social investing, with its focus on long-term social and environmental sustainability, can help to refocus finance on the long-term.
Adam Kanzer, Domini's Managing Director and General Counsel, draws on his experience as the head of Domini's shareholder activism program in a chapter examining the use of shareholder proposals to address corporate human rights performance. His chapter outlines the legal basis for these proposals and shows how nonbinding shareholder proposals have successfully influenced corporate behavior even when they fall far short of a majority vote. He points out, for example, that the shareholder proposals that helped bring Reverend Leon Sullivan to the Board of General Motors received less than 3% of the vote. Sullivan later authored the Sullivan Principles to guide businesses in apartheid-era South Africa, which played an important role in ending apartheid.
- Steve Lydenberg, "Building the Case for Long-Term Investing in Stock Markets: Breaking Free from the Short-Term Measurement Dilemma" (Read pdf)
- Adam Kanzer, "The Use of Shareholder Proposals to Address Corporate Human Rights Performance" (Read pdf)
According to its publisher, Finance for a Better World "provides an overview of current advances regarding the integration of sustainability in the financial sector. Its originality lies in the fact that it does not focus exclusively on a particular aspect of this emerging trend, but instead, presents various illustrations — or instance in the fields of SRI, sustainable banking or innovative investments — of what can be considered as the beginning of a paradigm shift in global finance."
The book was edited by Henri-Claude de Bettignies, the EU Chair Distinguished Professor of Global Governance and China-Europe Business Relations at CEIBS, Shanghai, China and François Lépineux, a Research Fellow at INSEAD, and Professor and Head of the Center for Responsible Business at ESC Rennes School of Business, Brittany, France.