I hate to date myself, but I'm old enough to remember having three pairs of shoes. The Buster Browns were for all the time; these sturdy brown lace-ups were for school, play and most activities. Next in usefulness were the black patent leathers with the velvet bow; these were for birthday parties, church, dinner with my grandparents and holidays. Finally came the Keds. Keds were only for playing tennis. Yes, this is true, and although it was a long time ago, it was in my lifetime.
This would never work today. Possessions have swamped us. Shoes have become specialized; so have scissors, batteries, candles and razors. Most observers agree that the demand for stuff has horrific implications. It creates ghastly environmental effects as we rip out raw materials to make things. It bankrupts families.
In Culture and Consumption, Canadian cultural anthropologist Grant McCracken introduced the concept of the Diderot effect, the unintentional transformation a simple acquisition sets in motion. In "Regrets on Parting with My Old Dressing Gown," French Enlightenment philosopher Denis Diderot bemoaned the sorry state of his life, the result of a gift of an elegant red dressing gown from a well-meaning friend. The dressing gown had been so fine that he had replaced his straw chair with one covered in Moroccan leather. He had replaced his prints along with his desk and updated his study. This improvement process went on until one day he felt unwelcome in his own study. He had become a slave to a level of fashion befitting his new dressing gown and regretted it.
It may seem a silly story, but we sense its rightness. And I would argue it gives us a special insight. Perhaps some types of consumption are positive change agents. Consumption is an enormously influential force. It affects behavior patterns of individuals at the personal level in such a way that whole societies are transformed. When anthropologists attempt to open communications with a jungle tribe, they leave pots and other goods the tribe finds useful and values. The door is opened.
We know this. Now we must harness it.
I look at my own consumption. A sneaky change took place over the past decade. Maybe it started with purchasing Ben & Jerry's yummy ice cream. I found I read the carton and wondered why other ice creams didn't tell me what a fine person I am. Then came Stonyfield's yogurt. I got so educated that I wandered into a Whole Foods. After three visits, I gave up on fruits and vegetables if they weren't organic.
Pretty soon, I was getting political about this. I boycotted coffee shops that didn't offer fair trade coffee; I started reading more and more about the politics of hunger and the dangers of pesticides. I noticed which politicians were raising my issues. It changed me. My eccentric Aunt Sylvia doesn't buy any clothing first hand. She's in her eighties and has saved what is rumored throughout the family to be a fortune. But she thinks buying new clothing is just plain wasteful. I've gone from thinking she was an oddball to thinking she's fantastic.
Now I'm becoming the oddball. When plastic bags come from a dry cleaner, I tie off the opening where the hanger was and use them as garbage bags. Last Christmas, my adult children came over to take the ribbons, boxes, papers and cards I'd saved, sometimes for several years running. It's a lucky thing they do, because I gave up physical gifts four years ago so have no use for the trimmings. It isn't that I'm against giving. I put three dollar bills in my pocket each morning and give them to the first three people who ask.
Did buying Ben & Jerry's ice cream make me a more tolerant woman? It did mark the beginning of a change. Like Diderot, I am caught in a continuous process of expanding and improving my new sense of self. But unlike Diderot, it feels right. I feel more and more welcome. I feel more and more a part of something important and good.
I'm hoping the purchase of mutual fund shares from a responsible fund family does the same thing. The investor has taken a casual, perhaps thoughtless, step, little suspecting he or she has begun ajoumey of personal redefinition. At some level, this person is no longer one of the overwhelmed, buffeted by forces beyond his or her control. This individual will take small steps: shop more deliberately, vote more deliberately, read the newspapers differently and be a more engaged (and tolerant) citizen.
Originally Appeared on Huffington Post
From The Landscape of Integrated Reporting: Reflections and Next Steps, published by Harvard Business School (November 2010)
an interview with Adam Kanzer by author and journalist Marc Gunther (August 2010)
Domini Chief Investment Officer Steve Lydenberg, in collaboration with Jean Rogers of the consulting firm Arup and David Wood of the Initiative for Responsible Investment, has published From Transparency to Performance: Industry-Based Sustainability Reporting on Key Issues.
The authors believe that mandatory sustainability reporting is urgently needed in the U.S. and that the development of industry-based key performance indicators can play a crucial role in any such mandatory reporting scheme.
"It is our hope," they write, "that establishing KPIs [key performance indicators] for all sectors will enable companies to move from a compliance driven 'disclosure' mindset to one of managing — and even competing on — performance on the sustainability issues that matter most."
The reports builds on the important work done by the Global Reporting Initiative in establishing a "credible set of universally applicable indicators" and outlines a method for the development of KPIs within the context of this broader set of indicators.
This method for developing KPIs relies on three principles: simplicity, materiality, and transparency. This method should be useful for regulators and stock exchanges considering target requirements, corporations seeking to improve their sustainability reporting, and stakeholders and investors who wish to improve their assessment of the progress of companies toward sustainability.
Domini Chief Investment Officer Steve Lydenberg and sustainability investment strategist Graham Sinclair of Sinclair & Company have published "Mainstream or Daydream? The Future for Responsible Investing" (PDF) in the April 2009 issue of the Journal of Corporate Citizenship,
The article begins by surveying the state of responsible investing today, then poses — and answers — three key questions for each of three stakeholders: corporations, institutional investors, and financial and academic communities:
- Can the widely accepted definition of the role of the corporation as a short-term profit-maximizing machine be changed, and, if so, how?
- Will corporations come to recognize that rule-setting by government can enhance their abilities to address social and environmental challenges, and, if so, why?
- Can corporations work cooperatively with government to define the relationship between these two powerful forces so that the pursuit of private goods does not undercut the creation of public goods?
- Should the goal of investing encompass broad benefits to society as well as short-term, price-based returns, and, if so, in what ways?
- Should politics be separated from investment decision-making, and, if so, who is to make this distinction?
- Should the practice of responsible investment be applied across asset classes, and, if so, is this practice the same for all classes?
Financial and academic communities
- Should the value of investments be assessed in terms other than stock price, and, if so, what is the yardstick for such measurement?
- Should responsible investing be legitimized as a key part of the investment process, and, if so, through what means?
- Can individual investors be active enough "financial citizens" to make responsible investing a reality, and, if not, why not?
The answers to these questions, the authors say, could point the way to fundamental changes in the relations between corporations, government, and society in general, as well as the basic principles on which the financial community operates.
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.
From Finance for a Better World: The Shift Toward Sustainability (Palgrave Macmillan, April 2009)
(Earthscan, December 2008)