The following article has been contributed by the Ecumenical Council for Corporate Responsibility (ECCR), which encourages companies to meet higher standards of corporate responsibility, while assisting churches and their members to make investment decisions which will have a responsible and positive impact:
We all know that the actions of multinational companies can have a huge impact – for good or ill – on the well-being of communities around the world; and indeed on the fabric of the earth itself. We have seen dramatic examples recently in the global financial crisis and in the Deepwater oil disaster off the USA. But every day around the world the policy and practice of well-known companies with regard to human rights, employment, supply chains and environmental impact has a significant effect on the lives and livelihoods of communities, particularly on the poorest.
Christian faith calls us to work for justice and environmental stewardship. But often we feel helpless to change the actions of the powerful, be they governments or multinational companies. In fact we potentially have much more influence than we sometimes realise. The positive impact of consumer power has been graphically illustrated in recent years by the exponential growth of fair trade. We also have power as investors and shareholders.
All of us are, one way or another, investors in companies and therefore part owners. This may be directly through owning shares, or indirectly through our pension funds, savings, bank accounts and insurance policies, and through the church we belong to. Most church denominations are major shareholders.
Shareholders, as company owners, give companies their mandate to operate. What companies do, therefore, they do in our name. Investment entails responsibility. Awareness of this fact is a key ethic for Christians, and accepting this responsibility empowers us to realise that we can all participate in improving the policy and practices of companies.
There are three main aspects to ethical investment (sometimes referred to as ‘socially responsible’ or simply `responsible’ investment):
1. Negative – Choosing not to invest or to divest/disinvest from industry sectors, e.g. armaments, tobacco, gambling, pornography, or from companies with a poor record on human rights, environment, etc.
2. Positive – Choosing specific good things to invest in, e.g. sectors like sustainable forestry, renewable energy, health care, & sustainable property, or the most responsible looking company in its particular sector. Micro-finance for small scale start up business, mainly in developing countries, and funding for social enterprise are becoming increasingly popular as positive investments, e.g. through Oikocredit, Shared Interest, and Big Issue Invest. Sometimes investors choose to accept a lower return than the current market average for this sort of investment in recognition of the additional social return generated.
3. Engagement – Talking to those multinational companies in which investments are held to try to improve one or several aspects of their corporate responsibility. If the dialogue does not progress satisfactorily, shareholders can make their concerns more public, e.g. through questions and voting at the company AGM, and by filing a shareholder resolution, e.g. shareholder resolutions on tar sands extraction at the 2010 AGMs of BP and Shell.
ECCR (the Ecumenical Council for Corporate Responsibility) is a membership organisation which ties together corporate responsibility and ethical investment issues by undertaking research, advocacy and dialogue to encourage companies to meet higher standards of corporate responsibility, while assisting churches and their members to make investment decisions which further this work through responsible and positive impact investment. ECCR’s website www.eccr.org.uk has lots of information about current issues, ideas for action, and the chance to sign up for a monthly e-newsletter and to become a member or make a donation to support ECCR’s work.
Helen Boothroyd
Church and Membership Relations Officer, ECCR
Email: [email protected]; Tel: 075 0393 1172