Can Businesses Maximize Profits AND Social Benefits?

Can businesses maximize their profits and the social benefits they create?

By Bahar Gidwani

Can businesses maximize both their profits and the social benefits they create? Or, do economic and social profits compete with one another? 100+ years of literature and lore have trained us to believe that businesses can’t optimize both their profits and their social benefits. From Upton Sinclair (e.g., The Jungle) and Charles Dickens (A Christmas Story), through Erin Brockovich and The Informant!, we have heard of countless examples of horrors that can be caused by corporate greed and money-grubbing.

However, a number of people seem to believe that this paradigm can be broken. A few weeks ago, I attended a Harvard Business School of New York seminar called Green Private Equity: Investing in Our Future that discussed Private Equity’s involvement in encouraging sustainability. The session was led by Diana Glassman of EBG Capital and the panel included one of McKinsey’s better-known former partners, Carter Bales.

I had known Carter when he was one of the top partners at McKinsey’s New York office. I reconnected with him recently, when I learned that he had started a PE group targeted on sustainability and energy-efficiency issues called NewWorld Capital Group. During the talk, Carter referred to the area he works in as “the Virtuous Quadrant.” He seemed to believe that he could generate above-average returns, by investing in and supporting socially-positive businesses.

via CSRwire Talkback.

Do You Know What Lurks in your Retirement Plan?

Do you look for financial return at almost any cost?

If your retirement plan provider knowingly supports investments that support governments engaged in crimes against humanity, e.g. Sudan, would you switch?

That’s exactly what the Unitarian Universalist Association (UUA) did to Fidelity.  UUA switched away from Fidelity when it became clear that “Fidelity’s position on investing in the Sudan hadn’t changed one iota,” according to Peter Muellar, President of UUA .

Unitarian Universalist is a liberal religion with Judeo-Christian roots. It has no creed. It affirms the worth of human beings, advocates freedom of belief and the search for advancing truth, and tries to provide a warm, open, supportive community for people who believe that ethical living is the supreme witness of religion.  The Unitarian Universalist Organizations Retirement Plan provides benefits to about 2,800 UUA staff members, ministers, church staff, and their families, with investments totaling approximately $178 million. Fidelity has managed the UUA accounts since 1999.

Sometimes, we go too far in our analysis of what we buy — should I buy organic free range non toxic carpet cleaner for my yacht?   In the case of crimes against humanity, however, its not a joke.  We can do something about these atrocities when we object to financially backing them.

One of the key characteristics of our community, is the strong desire to pay attention to what we buy and who we support.  We are torn about pulling into the BP station for a fill up; “Am I using too much petroleum?  Why am I supporting BP?  Don’t I hurt my neighbor when I boycott his station even though he has nothing to do with the spill?”

We cannot get every decision right. Moving toward a sustainable and responsible lifestyle is a process not a destination. We’re always considering options.  We’re constantly asking ourselves, “How far should I go?”

Investing is an area where many are easily confused about impact and options.  Understanding and offering appropriate investment options as an employer of a mission driven organization is a whole new row, which most don’t want to hoe.

In primitive times, it was an easy choice to choose Fidelity for a 401(k) option.  As a retirement plan record keeper and administrator, Fidelity is one of the best.  As a result, I see a lot of mission driven, sustainable, responsible and conscientious organizations with Fidelity 401(k) plans.  However, the fact remains that Fidelity’s position on certain investments are not in-line with those employee’s beliefs and moral compasses.  If you are currently using Fidelity ask them to divest from the Sudan, and see what they say. If your employer is using Fidelity ask them to consider switching, and see what they say.

Check out the links below and begin to consider not only who your provider is, but what companies the funds they offer hold.

Money Central has a great tool to look at top 25 holdings of almost any mutual fund.

http://moneycentral.msn.com/investor/partsub/funds/holdings.asp?symbol=csxax&Funds=1

Scan your fund for animal testing, GMO crops, environmental degradation, human rights violations, and genocide, and determine whether your money is growing with the right people.

These recent press releases speak to the issue of genocide.

UUA Moves Retirement Plan from Fidelity to TIAA-CREF. Announcement from the UUA, May 21, 2010. (UUA.org)
Special Board Meeting, May 20, 2010. Agenda and reports. (UUA.org)
TIAA-CREF. Will begin managing UU retirement funds beginning in the fall of 2010. (tiaa-cref.org)
End Crimes Against Humanity in Darfur, Sudan. Action of Immediate Witness passed by the UUA General Assembly, 2005. (UUA.org)
UUA pressures Fidelity over Sudanese investments Retirement plan holders urged to change funds. Jane Greer

Shareholder Advocacy – Engaging companies in dialogue

Environmentally responsible investing is about more than just avoiding unfriendly companies. Green Century Capital Management (Green Century) is committed to shareholder advocacy as a critical component of environmentally responsible investing, and the promotion of corporate environmental responsibility through active dialogue with companies has been a primary mission of Green Century since our inception in 1991.

What is Shareholder Advocacy? Green Century helps foster a sustainable economy by directly encouraging companies to lessen their environmental impacts. From strategic dialogue with management and top executives, to raising issues with the public and other shareholders through the filing of shareholder resolutions, to responsible proxy voting at the companies in which the Green Century Funds hold shares, Green Century employs numerous strategies to encourage improvements in corporate behavior. We work in coalition with other socially responsible investors, religious leaders and our environmental non-profit partners to actively encourage companies to adopt cleaner and healthier practices and products.

via Shareholder Advocacy – Engaging companies in dialogue.