Here is how the Episcopal Diocese of Minnesota is
Investing
by Len Freeman
1) prior to this year we relied essentially on the "socially
responsible investing screens" of the national Episcopal
Church, since most of our monies were invested through the
DFMS Pooled Fund.
2) This year [2005, ed.], as we have moved back into managing
the funds ourselves, we are looking at our investments from
a number of standpoints, including that which is usually
called "socially responsible investing." This
is a style that, as you may know, involves a number of "screens"
which look at companies for investment on a number of factors.
Amongst these are environmental/ecological stewardship,
others include employee fairness practices, issues around
minority hiring and advancement, so called "sin"
industries (alcohol, tobacco, gambling, etc), integrity
issues re: financial records, etc. There are a number of
pretty broadly used screen indexes, including the Domini
and Calvert social indexes. Several mutual funds invest
only in funds included in these indexes, as well as sometimes
adding other screens. As a policy we invest only through
mutual funds, rather than individual stocks.
3) With this in mind we have begun looking into specific
"socially responsible" funds for their suitability
for portions of our portfolio. Not all the screens are the
same, nor the results, and you can get some interesting
oddities (i.e., Starbucks ... which up to now reportedly
had been a "darling" of socially responsible funds
because of the way it buys coffees, and dealt with labor
issues, and social issues ... recently got bounced from
some of the funds that rule out "sin" industries,
because it agreed to let Jim Beam, Inc., market a coffee
liqueur under the Starbucks name. I have a hunch that would
not bother most Episcopalians, but it says something about
the complexities.) In any event, we have asked our advisor
to specifically look as such funds for possible inclusion.
4) New data, that was shared at the Consortium of Endowed
Episcopal Parishes in February 2005, indicates that "Socially
Responsible" business practices are in fact good for
business ... in the long run avoids law suits, regulation
problems etc. So that most of the S&P 500 type companies,
with some notable exceptions, in the long run tend to be
those that in fact show up on the socially responsible investing
lists. This means that doing pretty much "plain vanilla"
investing through the larger index funds on the whole, ends
us up in a pretty much good place re: being socially responsible.
Not perfect, but good to know.
5) We have recently increased the percentage of our portfolio
invested overseas. While that may not seem immediately connected,
it in fact is investment that supports the development of
emerging nations, moving them onto the world's economy track
... and raising up everyone's standards, including the environmental
ones. This aids 3rd world development and, thinking about
it specifically as investing Christians, Jesus loves them
too.
6) The Consortium workshop this year on socially responsible
investing (there is one) interestingly focused more on voting
Proxies, rather than whom one invests in per se, as an increasingly
used tactic. While we don't invest directly in individual
stocks, and therefore don't have proxies to vote, it gives
us an idea of how others are managing this.
I hope the above is helpful. At the least it attests that
as diocesan trustees we are in fact aware of, and actively
looking at, how our investments reflect our values.
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