Presentation by Lawrence Ladd, Financial Advisor, UUA, and
William J. Gardiner, Director of Anti-Racism Training, Faith in Action Department, UUA

Purpose:
To inform people about UUA's recent work in this area, looking at what the UUA currently offers resources that will be available to congregations.

The panel consisted of:
Lucia Santini Field, Chair of the UUA's Investment Committee
Bill Gardiner, Director of Anti-Racism Training, Faith in Action Department, UUA
Jim Gunning, Chair, Investment Committee of UUA Service Committee
Rev. Dorothy Emerson, participant in Socially Responsible Investing

What is socially responsible investing?

Lucia Santini Field explained that socially responsible investing has been around for more than three decades, the UUA has been involved in it since the mid 60s. In the early years of socially responsible investing, the idea was to exclude investments in countries and organizations, such as the South Africa divestment process.

Socially responsible investing is now about building coalitions. Positive social investing can mean more community investments, as well as focusing on investing in companies that have more progressive social policies – for example, companies listed in the publication The 100 Best Companies to Work For.

Socially responsible investing addresses many issues, including product purity and safety, environmental standards, workplace safety, and women and minorities in the workplace and in senior management. The extent to which groups share their concerns determines how effective they are. Many groups can put the power of their money behind their issues.

What is the history of socially responsible investing?

Bill Gardiner pointed out that a "torah" has emerged in this field. One thing that makes Gardiner proud to be a UU is our involvement in this area; we were among the pioneer leadership groups back in the 1960s to use our institutional power. For example, we put pressure on Kodak in the 1960s to employ people of color. In 1970 the UUA Board of Trustees took a stand that 5% of its endowment funds should be put into "alternate investments" – community loan funds. We were one of the first denominations to make that kind of move.

In the 1960s and 1970s, GA passed four resolutions to empower the Board and Finance Committee to do socially responsible investing. In 1979, GA passed a resolution against Nestle and its production of infant formula in the third world. In 1986, GA passed a resolution against Shell Oil for its investment in South Africa. Our handbook on environmental issues lists 30 resolutions that give the UUA a basis for actions.

Our working groups look at six major areas, -- international health, global finance, weapons and military, equal opportunity -- and working groups work all year long on these topics.

30 years ago, if you didn't like what a company was doing, you sold the stock. Now the thinking is to try to educate management, saying, "Here's what some of your shareholders are thinking about these issues: here are ways that it can be changed." Management does not want to be embarrassed at shareholders' meeting. Social investors tend to be more long-term in their view of things than management, which looks only at quarterly earnings. Early on, people protesting nuclear power took the long view that nuclear power was a good thing.

There is a current proposal to establish a permanent structure that would look into areas other than endowment investments, such as where UUA deposits its funds, and whether our bank practices good policies. The goal is to have a link on the UUA Web site for congregations and individuals to find out about certain stocks and proxies that are to be voted on; and what action is recommended.

The UUA's policies are not to invest in tobacco companies, companies with more than 5% investment in weapons, companies that blatantly pollute the environment, or companies that have blatant discriminatory policies. Other denominations won't invest in companies that invest in gambling, or in prison industry.

An audience member asked where the UUA stands right now. A structure was set in place where the Board sets policy for socially responsible investing that the Investment Committee implements. Board policy is primarily based on exclusionary screens, such as tobacco, weapons manufacturers, and blatant labor and environmental abuses.

What about congregational policies?

Many congregations have endowment funds. Before socially responsible investing, we would pray for peace on Sunday, and invest in war on Monday through Saturdays. There were painful contradictions around espoused values and then what really happened to investment of dollars. In your congregation, ask whether the leaders of the congregation feel that moral imperative to do that kind of examination. Then take steps to make an approach that is sensible and can work. Create a working group that is broadly constituted – people from social responsibility, from finance committee, and with investment experience. How do you make a change and how do you build a broad-based group that is truly representative of the congregation? You need a picture of where dollars are currently invested, and what are the social ramifications of where they are invested. Think about what your congregation wants the future to look like, and about the core values that you want to have represented.

One option is for the church to manage its own money, set up its own policies. Another option is to use the UUA pool of funds, which the UUA will manage on behalf of the congregation. Then those dollars would fit under the criteria of socially responsible investing that the UUA has. A third option is to select mutual funds that fit with the dominant policies that you have.

An audience member asked whether socially responsible investing necessarily presents an obstacle to one's fiduciary capacity as a member of a congregation's investment committee? Studies have shown that the answer to this is "No;" many other factors affect a stock's performance. There MAY be short periods of time when a socially screened portfolio may outperform or underperform a non-socially screened portfolio; but over the long term that turns out not to be the case.

Someone else asked whether there is a model investment policy that congregations could look at. The speakers recommended looking at the UUA Board of Trustees website, at http://www.uua.org/TRUS/trusmain.html, but ultimately, your congregation's individual situation should be the main source of guidelines for investment strategies.

A UUA fund prospectus is available from contact Jerry Gabert, Treasurer of the UUA, (extension 305) at jgabert@uua.org — ask for information on "Pool C."

Resources

Bill Gardiner provided the following resources for congregations and individuals:

Two useful documents available from the Interfaith Center for Corporate Responsibility (ICCR):
Conscientious Investor's Guide for Socially Responsible Mutual Funds and Investment Services – gives an analysis of some of those funds and what their criteria are
Lending a Hand – A Congregation's Guide to Community Investing

Investor Responsibility Research Center has a huge listing of various publications in this field
For books:Socially Responsible Investing, Cambridge Associates – in-depth survey of socially responsible investing, and review of mutual funds engaged in that
For Community Development information: National Congress for Community Development

"Reporting on a Fresh Approach to Socially Responsible Investing"

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Information Resources on Socially Responsible Investing

Information from the Interfaith Center for Corporate Responsibility
475 Riverside Dr. Room 566
New York, NY 10115
Phone: 212-870-2295
E-mail: info@iccr.org

ICCR does not have a web site of its own but if you type in Interfaith Center for Corporate Responsibility you can make reference to 2,700 issues.

"The Corporate Examiner"
This is a publication that examines the social impact of corporations and the application of social criteria to investments.

"Guide to Religious Community Development Investing, 2000"
Provides portraits of 42 religious community development investors.

"Profiles of Religious Community Development Investing"
Provides in-depth profiles of selected religious investors.

"Newspacket of the Clearinghouse on Alternative Investment"
A quarterly service that provides the latest information on alternative investing and community economic development opportunities.

"The Conscientious Investors Guide to Socially Responsible Mutual funds and Investment Services"
This is an annual publication.

"Proxy Resolution Book"
Includes guidelines for submitting proposals to corporations on issues of social significance.

"Lending a Hand: A Congregation's Guide to Community Investing" by Kathryn Tholin (1995)
Opportunities for investing in community economic development.

Web Sites on Socially Responsible Investing

• Co-op America http://www.coopamerica.org
• Good Money http://www.goodmoney.com
• GreenMoney Online http://www.greenmoney.com
• Investor Responsibility Research Center http://www.irrc.org
• Natural Investing http://www.naturalinvesting.com
• Natural Investor http://www.naturalinvestor.com
• Hope Magazine http://www.hoepmagazine.com
• Social Funds http://www.socialfunds.com social
• Social Investment Forum http://www.socialinvest.org

Books on Socially Responsible Investing

• Socially Responsible Investing Cambridge Associates, 1999 One Winthrop Sq., Suite 500, Boston, MA 02110 617-457-7500
• Good Money Social Funds Guide: A Guide to Socially Screened Funds PO Box 363, Worcester, VT 05682 Phone:800-535-3551
• Investing for Good: Making Money while Being Socially Responsible. Peter Kinder, Steven Lydenberg, and Amy L. Domini, New York: Harper Collins
• The Investor Responsibility Research Center has a wide variety of publications on socially responsible investing.

Other Resources

The National Congress for Community Economic Development 103 15th St, NW, Suite 325, Washington, DC, 20005 Phone: 202-289-9020 http://www.ncced.org

National Community Capital Association, Public Ledger Building, Room 572, 620 Chestnut St., Philadelphia, PA 19106 Phone: 215-9234574 http://www.ncc.org

Reported by Allan Stern, edited by Malia Crawford and Margy Levine Young; formatted for the web by Kasey Melski.