February 2019 Money Talks

February 2019 Money Talks

MONEY TALKS and so should you

Many of us face a dilemma about our involvement in the world and how we can change what is happening for the better. If this is a question that you ask yourself, then I suggest you read on. Shareholder activism describes the actions many investors take to press corporations to improve their social and environmental practices—using their status as part owners or clients of companies as leverage.

The primary tool that shareholders use is the shareholder proposal, a request to corporate management for information or a change in company policy. These formal requests appear on a proxy ballot, which is mailed to shareholders who may vote by mail, electronically, or in person at the company’s annual meeting. Shareholders also may discuss those issues with corporate managers and ask for changes they want to see.

Responsible investors often introduce and support socially responsible investing and shareholder resolutions, in coalition with socially responsible mutual funds and pension funds. The downfall of apartheid in South Africa resulted from the divestment of pension funds by universities, religious groups, and local and state governments. In 1990, investors pulled their money from any company doing business in South Africa and soon the South African government knew its path of oppressing Black Africans was economically unsustainable.

Divestment means taking your money out of a particular investment. The goal is to do so in coordination with others, to send a market signal to a company or industry that its actions are unsustainable and harmful and that investors and customers want it to change its course.

Individuals must remove their funds from companies that fund fossil fuels (e.g., Bank of America and Wells Fargo) and demand that these companies take climate change more seriously. Major oil companies like Shell are citing divestment as a material risk to their business.

Investors are pulling their funds out of private prison companies such as CoreCivic and GEO Group. Both companies subject incarcerated people to harsh conditions, brutal treatment, and poor nourishment, which are human rights violations. And finally, after much pressure, BlackRock, the world’s largest asset manager of funds, stated it will speak to weapons manufacturers and retailers in which it invests “to understand their response to the Parkland shootings in Florida.” Divestment must be directed to companies that are involved with ICE policies of separating families.

Each of us must undertake our “due diligence” to assure that our money is not contributing to bad and destructive policies that violate all of our values. Speak to your bank manager and your financial advisors and use your money to promote social and economic justice.

–Marcie Cohen, Vice President for Administration and Guest Contributor