Investment Policy

Experience

Recently I met with one of our Investment Managers who participated in a Board of Directors meeting for the SSND Cooperative Investment Fund (CIF) where I had raised some questions concerning the corporations in which they invest for us. Do managers consider the environmental impact of a company’s practices, the human rights and safety factors for their employees, the risk of management practices of the financial institutions, and the impact on the community where the plant operations exist?

I was then invited to the main offices a few miles down the highway from our Justice, Peace and Integrity of Creation (JPIC) office in Wilton, Conn. Here I met several other staff members, including a portfolio manager who had attended one of our past CIF meetings. As our conversation went on and my never-ending questions continued, he acknowledged having gained new insights after listening to our concerns raised at the past Board meeting. He now looks at these issues when selecting companies for his clients’ investments. He considers the policies and practices of each company, as well as their sustainable social, environmental and economic procedures which have a meaningful impact on the people and communities in which they operate. I thought, “Yes, we SSNDs are making a significant contribution to the shaping of a more socially responsible corporate culture.”

Analysis

Why do SSNDs invest in large corporations?

Religious congregations of women and men began purchasing stock in companies when retirement needs became more than what their income could offer.

For many years, SSNDs along with other religious congregations belonged to faith-based coalitions as active investors. We have an enduring history of corporate engagement that has proven to be influential on corporate policies that promote justice and sustainability. While these coalitions are rooted in the values and principles of a diversified faith-based group, they are also grounded in the practical conviction that business leaders who choose to serve the common good build more profitable businesses over the long term.

SSNDs have Investment Guidelines, containing social and environmental screens, which determine the corporations from which we choose not to purchase stock. In some situations we maintain a few shares in order to be engaged with the corporate executives on critical issues such as the environmental impact, the human rights impact on communities, and on internal corporate practices and policies. This is a significant change from an old paradigm when companies alone decided what they thought communities needed and what investors expected of them.

As a member of the Interfaith Center on Corporate Responsibility (ICCR), SSNDs have advocated for corporate programs and policies that promote sustainable social, environmental, and economic practices that have a positive impact on all. In addition to these corporate dialogues, we also file resolutions with other ICCR members on environmental, social, and corporate governance issues. Then we do the shareholder voting on all the resolutions for each company in which we hold shares.

None of these actions, such as participation in dialogues, filing resolutions, or shareholder voting, would be possible if one chose to divest of all stock in a particular company. While divestment is an option, maintaining engagement with the corporation is often a more effective strategy.

Faith Reflection

In Love Cannot Wait, the directional statement from the SSND 23rd General Chapter, we commit ourselves to direct our resources and ministries toward education that transforms and calls all to eliminate the root causes of injustice. One way to attempt reducing, and maybe eradicating, injustices within one segment of our society is our engagement with large corporations.

You Are Sent, the constitution of the School Sisters of Notre Dame, speaks of our corporate ministry and then emphasizes that a particular concern in all ministries is the establishment of a just society (SSND General Directory 33). This reminds us of the plea in Exodus, “Do not deny justice to a poor man”(Ex 23:6) and “Do not mistreat a foreigner; you know how it feels to be a foreigner, because you were foreigners in Egypt.”(Ex 23:9)

Over the years we have communicated with the national and local elected representatives in our government. We lobbied for legislation which we believed would bring about better situations for the common good of all people in our country or city. For over twenty years, we have been associated with the United Nations and worked to change structures within governments throughout the world. We focus on education particularly for the girl child and human rights for all with an emphasis on women’s rights. The environment, sustainable development, and eradication of poverty are also part of our international concerns.

Our Shalom document and Love Cannot Wait both call us to a prophetic stance reminding us of the Hebrew prophets preaching with passion and courage. Amos called for justice to “flow like a stream,” and then whispered “Perhaps the Lord will be merciful to the people of this nation who are still left alive.”

As prophets, we look at the reality before us in our corporations, in our governments, and other institutions. We proclaim a vision of how things could be. We can influence and encourage corporations to change their structures to be more transparent; more just with their employees and their shareholders; more caring with our water, air, and land; to consume less fossil fuel; to eliminate child labor in their supply chains; and to be less concerned with excess executive salaries and profits leading to greed.

Whether we work for justice within our own country’s government, internationally through the United Nations Commissions, or inside corporations with the Interfaith Center on Corporate Responsibility, the concerns are the same; they are social, environmental, economic, and governmental. While we work to change structures, let us recall Jesus’ Beatitude, “Blessed are those who work for peace, for they shall be called children of God.” Perhaps in time, we will realize that in order to bring peace we need to witness to our oneness with God and all beings. As SSNDs, we are called to address each of these by “deepening the contemplative and prophetic dimension of our lives by grounding who we are and all we do in the love of the Triune God.”

Action

SSND Cooperative Investment Fund co-filed several resolutions with other ICCR members during the last season. Dow Chemical’s resolution on Genetically Engineered Seed and PepsiCo’s resolution on Labeling Genetically Engineered Products were withdrawn at the company’s request with a promise to dialogue. The co-filers agreed and the dialogues are in process.

Within the fossil fuel industry, SSND Cooperative Investment Fund co-filed a resolution with Chevron, Risk Management Reporting for Shale Energy Operations, and with Exxon Mobile, Adopt Greenhouse Gas Reduction Goals. Each of these received a very high percentage of the positive votes. In the defense industry, a resolution concerning Report on Corporate Lobbying was filed with Lockheed Martin and it received a small but significant positive vote.

Resolutions are not legally binding, but this is one way in which shareholders can express their expectations to the CEOs and Boards of the companies in which they have invested their money. On the other hand, dialogues provide an ongoing engagement with the company’s executives.

Dialogues with ConocoPhillips have continued regularly on Natural Gas Production and Hydraulic Fracturing, and also Indigenous Peoples’ Rights, and with Starwood Hotels on Human Trafficking and the Training of Hotel Staff Employees.

For more information on corporations and on issues of concern to socially responsible shareholders, here are web sites which offer interesting challenges.

• The Forum for Sustainable and Responsible Investment
• Interfaith Center on Corporate Responsibility
• Ceres, Mobilizing Business Leadership for a Sustainable World
• As You Sow

Under Investor Relations and Sustainability Reporting in the web site of each company, you will find further insight into how investors are impacting company performance. The Business Section of your newspaper often provides current activities on these concerns.