Ethical investment: Investing in a better world
Sam Sender considers the progress made and what more can be done
When young Friends gathered at the Politically Engaged Young Friends Conference in mid-August, we discussed the arms trade, economic justice and the challenge of holding a tender kiss for three minutes as part of a photo stunt. But what really got us excited was ethical investment.
Transparency
For the first time, Britain Yearly Meeting’s (BYM) investments are publicly visible online. By standing up for transparency, BYM has shown the world that Quakers in Britain put our faith into action, tying our success up with the success of fair trade and renewable energy. Every day our money is working for a better world. BYM’s leadership on transparency follows a groundswell of grassroots enthusiasm for ethical investment. This year’s passionate Yearly Meeting epistle read: ‘Let us… practise our opposition to the current [economic] system: in our lives and in the deeply spiritual process of putting our money in better places.’
The epistle comes amid thoughtful discernment around BYM’s investment in HSBC, who partly finance the arms trade. Financial advisers are quick to point out that spreading investments between different sectors (including banking) has tended to reduce risk and keep funds safe. But questions still persist about funding the arms trade and the sustainability of the growth-based and oil-dependent economic system as a whole.
Quakernomics
When we discussed some of these intriguing issues at the conference, it became clear that we wanted to open up the discussion to the wider Quaker community. After all, investments shape our economy and so affect society and our lives. Thorny issues about good investment have been picked apart on the Quakernomics blog where young Friends, including me, have facilitated a debate about ethical investment. Quakers from all over Britain have been eager to contribute comments and articles, raising some very thought-provoking issues.
Sam Robinson, a student activist, wrote of the challenges in confronting financial interests. Jennifer Kavanagh, a microfinance practitioner, warned of the dangers of seeking high financial returns at the expense of social returns, as seen in the real lives of women in the global South. Other Friends explored the practicalities of living out the testimonies through investment. Nick Pyatt of the Quakers & Business Group framed ethical investment as a tool to speak truth to power. Another writer, Alan Kirkham, who founded a Quaker-governed ethical investment body, asked the challenging question: ‘Are we using the power of our money to make this world a better place?’
JRCT
It is a question that Quaker bodies such as the Joseph Rowntree Charitable Trust (JRCT) have been considering in detail. JRCT has £150 million to invest in their mission of radical change towards a more just and peaceful world. In the words of their former trust secretary, Stephen Pittam: ‘We have remarkable freedom to spend our resources as we choose. We are not constrained by the short term thinking that dominates both our political and economic systems.’
As part of JRCT’s transition to ethical investment, they are asking grassroots Quakers: ‘How would you invest £150 million to build a more just and peaceful world?’
A new investment policy in November 2010 committed five per cent of their funds to social and environmental returns, rather than purely financial returns. This has enabled vital progress in community hydro-electricity generators, affordable and fair office space, and children’s outdoor play equipment. JRCT have also committed to invest in a Social Stock Exchange, to support social enterprises and for ethical investors to find opportunities. They are innovators in making grants for facilitating ethical investment, such as their historic support for EIRIS, who research and advise about companies’ ethical performance, and a grant only last year to Ethex, who specialise in small-scale ethical investment.
More to be done
In August, twenty-five young Friends, including myself, wrote to JRCT asking them to build on their excellent progress towards ethical investment. As Friends aged between fifteen and twenty-five, we met at Quaker youth events and had a chance to discuss the issue while camping together in Weymouth. Our letter highlighted that profits from seven-figure investments in Shell, BP, Barclays, RBS, Lloyds, HSBC, Adidas, Unilever and Tesco have funded five-figure grants for flagship campaigns by JRCT grantees against these very companies. Last week, on the Quakernomics blog, I invited all Friends to join young Friends in writing to JRCT to support their excellent progress and asking them not to lose heart. We are calling on them to engage with, and disinvest from, all companies that their grantees campaign against.
The trust secretary, Nick Perks, said: ‘As an investor, we aim to strike the right balance between funding the Trust’s grant making programmes, investing in enterprises which further our aims, avoiding investing in corporations whose activities conflict with our aims and encouraging business to be more responsible. Although we do exclude many companies from our portfolio on ethical grounds, we do not automatically disinvest from companies that our grantees are campaigning against. We regularly engage with companies in which we invest, either alone or in collaboration with other investors, and, when we can, we will use our position as a shareholder to echo our grantees’ concerns.’ Jackie Turpin, head of finance, wrote: ‘…we have started to look at the types of organisations in which we invest, with a view to challenging the current orthodoxy about how business should be organised.’
JRCT has, indeed, shown the world how investors should act. In 2010, JRCT engaged with, and disinvested from, the multinational Vedanta, which was building an illegal bauxite mine in Odisha, India, threatening the survival of local indigenous people. However, the nature of JRCT’s engagement with Shell, BP, Barclays, RBS, Adidas, Unilever or Tesco over serious ethical concerns seems unclear.
Resolving issues
It is also unclear what steps JRCT takes to resolve any investments that breach their investments policy. The policy bans speculative investments, as well as investment in the arms trade and extractive industries with poor human rights and environmental practices. JRCT, it could be argued, through Barclays, has profited from the financing of cluster bombs and depleted uranium munitions, as well as volatile speculation on staple foodstuffs, which the UN special rapporteur on the right to food described as an ‘absolute catastrophe’ for global hunger and poverty. Barclays had a total of £7.3bn in the arms trade in 2008, and has hit headlines recently for paying one per cent tax on its 2009 profits and illegally manipulating the Libor inter-bank lending rate.
The poor human rights and environmental record of Shell and BP are well documented. BP, which has an incentive to worsen climate change, is exploiting new drilling opportunities as Arctic ice melts and was involved in the Deepwater Horizon oil spill. Shell have been a target of Amnesty International’s campaigning for years due to their human rights abuses in the Niger Delta. JRCT, in the context of these internationally reported abuses, rightly gave a vital grant to Platform, an innovative and successful NGO that raises awareness of Shell and BP’s abuses, as well as the Green Alliance and BYM’s cutting-edge and effective Sustainability and Peace programme. How would JRCT grantees feel about being funded partly through profits from cluster bombs and depleted uranium munitions?
Never lose heart
The process of transition towards ethical investments is immensely challenging and in the past JRCT has lost money by seeking social and environmental returns. But I feel confident that by writing to them in favour of their transition, we can support them to never lose heart, and to continue their vital, trailblazing work for a more just and peaceful world. Ethical investment is just one way of putting our faith into action as Quakers and of living out our testimonies; its time has come. Let us practise our opposition to the current economic system: in our lives and in the deeply spiritual process of putting our money in better places as individuals, in our Local and Area Meetings, in BYM, and in the Quaker trusts and bodies that work for a better world.
As Nick Pyatt wrote on Quakernomics, ethical investment can be our way of speaking truth to power in the twenty-first century.
Visit Quakernomics at: www.quakerweb.org.uk/blog
Write to JRCT at: Nick Perks, JRCT, The Garden House, Water End, York YO30 6WQ. Or email nick.perks@jrct.org.uk and CC sam@ealingquakers.org.uk
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