Shareholder Action

Put Your Money Where My Mouth is…

 

No I am not hitting on you; nor do I have an peculiar pallet for coins; rather, I am writing this blog to share an advocate strategy that I have recently learned about.imagesss

It is called shareholder action and it is awesome. Granted, you do have to have some capital to begin this process, but if you put in the time you can make a big difference. Essentially shareholder action is when an investor, by virtue of their position as a shareholder, influences the company to pursue positive policies in their approach to social and environmental issues.

A person that invests in a mutual fund will:

  • Own a portion of that mutual fund;
  • Their mutual fund will own shares in companies;
  • Therefore, indirectly, that person owns shares in those companies and is, to some degree, responsible for its actions and activities.

Influencing change within the company may occur in the following ways:

  • Engaging management in a dialogue
  • Increasing corporate understanding of social issues
  • Working with companies that indicate a willingness to change
  • Voting shares in alignment with positive policies and practices

In Toronto you can partake in this by selecting a SRI fund or socially responsible investment portfolio from your bank. Unfortunately like most occasions when you try to do something good with money you usually have a horde of greedy bankers and fund managers selling you bullshit packages that do nothing for the greater good.

My best advice: Credit Union.

They’re significant less evil than traditional banks, they’re membership based, many are non-profits and a lot of them specialize in social capital. To put it simply when a bank creates a mutual fund package they include companies that help their bottom line: profits. Credit Unions are far less susceptible to this insider corruption because they are a member based co-operative (essentially if you’re a member; you own a piece of that bank) and you don’t care if Exxon gives the CEO of your bank a cut of their income.

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My Experience with RBC

A while back I walked into RBC with a chunk of change and asked my fund manager for “one socially responsible investment package please :)” He walked me into his office and printed off 2 packages and slid them across the table. One said SRI package and the other was a regular non-discriminatory mutual fund. He essentially explains to me “listen, SRI funds won’t make you as much money and they’re higher risk, I know you want to do the right thing but be smart- don’t sacrifice your future for this”

I understood that I probably wouldn’t make as much money, but I had accepted that, so I look at the package and the first thing I see is Apple Inc. Now, let me be honest, I am writing this blog on a Mac, I obviously have no authority to slander Apple at this point; however I cannot comprehend how Apple Inc could ever be considered a socially responsible choice, ever?? More-so, how is Apple not considered to be a profitable option?!?

Bewildered, depressed and defeated I declined both options and took my sac of change home.

Months Later I made the Switch to Alterna Credit Union

Alterna partners with Qtrade; an investment firm that specialized in SRI funds. They have a unique approach as they choose several companies that may not appear to be socially responsible, but are progressive thinkers and are willing to embrace social innovation. They know this because they sit at the table with these executive and have first hand experience with their policies, attitudes and future social ambitions.
Example: One of their member companies is Loblaw Co. (& Joe Fresh) Yes Loblaw Co seems evil, who wouldn’t think that considering the fact that a Joe Fresh label was beaming out of the rubble in the Rana Plaza collapse earlier this year. However, in the aftermath of the Rana Plaza tragedy only one Canadian company (of hundreds) has so far signed the Accord that will provide safer working conditions, fairer wages, and collective bargaining rights to Bangladesh workers. Guess who it was? Yup, Loblaw Co. Maybe this is because they were caught red handed, maybe it’s because of shareholder action, but I do know one thing; they’re a hell of a lot better than Walmart, or H&M who flat out refuse to do anything even though they source from the same factories.

The biggest difference between the two experiences was that this fund manager was enthusiastic about social change.

She prefaced our conversation by saying “a lot of people fall prey to the myth that SRI funds don’t produce a good return, but they can”  They are actively seeking a way for SRI to be a stronger tool for poverty reduction, job creation, and environmental stability, and for those funds to be profitable.

So my point is:

If you have some cash that you want to grow into more cash, why not chose a SRI fund? 

 

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