Social(k) Smarts: Keeping Score

Video: Social(k) Smarts: Keeping Score How are you keeping score?

Some people watch baseball and do line scoring. Others keep score with box scores. Line score is similar to single bottom line accounting. Box score is like triple bottom line accounting. How do you keep score of your financial returns?  How do you keep score of the way the game was played?

Keeping score using line score, or single line accounting, measures returns only.  $100 goes in and $125 comes out.  Financial wizards can measure financial returns with great precision.  They can even measure the amount of risk taken for the return.  But at the end of the game it is a line score.  What is harder to measure is how the game was played, how the returns were made.  If you want to really understand the dynamics of a specific game you use box scores.  This brings much more depth to the story of the game, or the investment.

We know Portfolio 21, a mutual fund, returned 2.99% annually, over the last five years as of Dec 31, 2010.  We know The Vice Fund, also a mutual fund, returned 2.43% annually, for the same time frame.  Very similar returns as seen from the line scores.

Let’s look at the box scores.  What companies do they look at to invest in?

The Vice Fund invests in companies, both domestic and foreign, engaged in the aerospace and defense industries, owners and operators, gaming facilities as well as manufacturers of gaming equipment, manufactures of tobacco products and producers of alcoholic beverages.” www.usamutuals.com/vicefund

Portfolio 21 invests in companies designing ecologically superior products, using renewable energy, and developing efficient production methods. Portfolio 21 companies seek to prosper in the 21st Century by recognizing environmental sustainability as a fundamental human challenge and a tremendous business opportunity.” www.portfolio21.com/

The box scores add a deeper understanding of the game. Triple bottom line accounting adds a deeper understanding of the investment.

How are you keeping score of your investments?  Are you measuring success by dollars only? Isn’t wealth more than cash in the bank? Returns at any cost, certainly not.  We can each use our own values and beliefs to decide what is important to measure, but we should be measuring more than the simple return.

In Depth – Activism – Portfolio 21

As investors, we have an opportunity to engage with companies and the public in addressing environmental and other corporate responsibility concerns that inform our investment process.

We employ several different engagement strategies, all of which are integrated into our research and investment process, thereby linking our investment decisions with the success or failure of our company engagements. We also support and collaborate with As You Sow, a non-profit organization using shareholder activism to ensure that corporations act responsibly. Our primary concerns are corporate actions taken at the expense of employees, environment, and community. Communications and Proxy Voting are the primary engagement strategies.

via In Depth – Activism – Portfolio 21.

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.

Green Century Posts Record Results on Shareholder Advocacy

Achieves Historically High Votes on Coal Ash Disposal, Natural Gas Fracturing, Other Environmental Threats

July 7, 2010 – As the Gulf oil disaster focuses national attention on the huge environmental problems caused by corporate irresponsibility and the enormous tolls environmental impacts can have on shareholders, Green Century Capital Management (Green Century) shares a more positive story – shareholders are taking action to change the corporate course and advocate for improved corporate responsibility.

“Shareholder advocacy is a critical component of environmentally-responsible investing,” said Larisa Ruoff, Director of Shareholder Advocacy for Green Century. “Recent environmental disasters such as the BP* oil well blowout and the Massey* mine tragedy are stark reminders that a company’s environmental performance can have dramatic implications for shareholder value. Green Century believes it is now more important than ever to use the rights and responsibilities that come along with stock ownership to encourage companies to increase transparency, mitigate risk and protect shareholder value.”

Green Century files shareholder resolutions each year calling on companies to address environmental problems related to corporate operations or policies. According to Green Century, the filing of shareholder resolutions, which are distributed to all shareholders and voted upon at a company’s annual shareholder meeting, allows critical environmental issues to be raised with a company’s Board of Directors, top management, and shareholders.

“The resolutions that we file and the pressure we are able to put on companies are powerful ways to protect both the environment and our shareholder value,” said Ruoff.

via Green Century Posts Record Results on Shareholder Advocacy.