Investors Demanding Social Justice

Read on to hear what Executive Director Laura Berry had to say to the New York Times about the work of the Interfaith Center on Corporate Responsibility (ICCR), of which Friends Fiduciary is a member.

By CLYDE HABERMAN, New York Times
Published: June 3, 2010
As instances of business malefaction pile up — Enron, Madoff, Goldman Sachs, A.I.G., Toyota, BP, and we’re just clearing our throats with that lineup — the concept of corporate responsibility has acquired the sour air of an oxymoron for many people. Laura Berry is not one of them.

Ms. Berry is the executive director of an organization that bears that very idea in its name: the Interfaith Center on Corporate Responsibility. It doesn’t accept that doing good and doing well have to be mutually exclusive at American companies, recent experience notwithstanding. If ever the corporate world could use a healthy infusion of responsibility, this would seem to be the time.

“We come at this issue from a moral perspective, but we also come at it as investors,” Ms. Berry said. “I actually believe that God, whatever God is, set up the system so that it works better when we don’t cheat.”

Her center started out nearly 40 years ago as a bunch of Protestant groups concerned about companies’ profiting from the unpopular Vietnam War and the repugnant system of South African apartheid. Over the years, it has expanded to encompass Roman Catholic and Jewish organizations. Its interests have expanded as well, to include issues like access to capital, environmental protection, global warming, health care and sweatshop labor.

The organization’s members are 275 institutional investors, an amalgam of faith-based operations and secular groups focused on social justice issues. They see it as their duty to attend annual shareholders’ meetings and use proxy resolutions that call on corporations to pollute less, to pay more, to rein in greed and to dispel the opacity that makes much of today’s financial gimmickry incomprehensible to most people.

Their goal is not to be just a pain in someone else’s neck.

“We’re not this sort of scrappy little group of folks who want to cause trouble or point fingers at people and say, ‘Shame on you,’ ” Ms. Berry said. “We’re investors. We want corporations to do well. The money that we are stewards of goes to pay for retirement plans. It goes to pay for mission work all over the world. It goes to keep congregations and communities up and running. We’re certainly not rooting for disaster in the capital markets.”

Ms. Berry sat the other day in her office at the Interchurch Center, a collection of religious and ecumenical groups on Riverside Drive, popularly known to New Yorkers as “the God box.” Given the corporate horrors of recent vintage, she had cause to say that “we’re getting some notice for having been right” about the wrongness of certain behavior.

“We look at commercial markets through a slightly different lens,” she said. “We saw stuff early.” For example, “we filed the first resolutions about subprime lending with six financial institutions in 1993.”

Members of the interfaith center have introduced hundreds of shareholder resolutions on matters like executive pay, environmental risks, credit default swaps, toxic chemicals, child labor, slavery and other practices that range from unsavory to downright evil.

EVENTS like the financial meltdown of 2008 and now the oil spill in the Gulf of Mexico suggest to Ms. Berry that groups like hers saw around corners, making them worthy of being listened to before disaster strikes.

“There are so many areas where we as investors see the places where systems con themselves into thinking that a major catastrophe can’t happen,” she said. “We’re concerned investors who try to identify risks that could be bad for humanity and bad for our portfolios. We feel strongly that these two things are deeply interconnected.”

Do corporations listen? Sometimes. Wal-Mart has changed some labor policies, Ms. Berry said, and some pharmaceutical companies have responded to “justice actions.” But in the corporate universe, turning a deaf ear remains a default position.

“Do they just pat us on the head, and send us away, and say, ‘Oh, it’s be-nice-to-nuns week,’ or whatever?” she said. Sure. “But they know we don’t go away,” she said. “We may be annoying. We may be trivialized. But we do our homework, and we don’t go away.”

And it could be argued, Ms. Berry said, that her group’s faith-based members are “the ultimate long-term investors.” She laughed, to seem not to be taking herself too seriously. Nonetheless, she said, “Our investment horizon is eternity.”

E-mail: haberman@nytimes.com

A version of this article appeared in print on June 4, 2010, on page A19 of the New York edition.



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