“Afghanistan Unveiled”(A)

I grew up in a small town, where everyone knew everyone and women were definitely “in the home” except when they were in sanctioned activities like cooking for baked bean suppers at the Grange Hall or teaching sewing at 4-H meetings. My father was cursed with four daughters – forced to adapt to having no sons to carry his name, toss a baseball or go fishing. His response was to buy baseball mitts and fishing poles anyway. By the time we were adults, my sisters and I had fuzzed the social difference between boys and girls so badly that we didn’t understand that we were supposed to screech at the sight of a wriggling worm and aspire to dusting trinkets in ruffled aprons. We’re obviously different from each other, the four of us, but one thing is very clear and a source of some irritation for my father. We are all “too independent for girls”.

We’ve all subsequently complained about the male-dominated world we still live in. But our universal answer has been to change the playing field by starting a company, a studio, a mental health practice and two non-profit organizations. We know how lucky we are that my father cared much more about fishing partners than coming out parties. We also know that we are lucky to live in a place where women have been deemed to be equal to men, at least officially. Even if the social environment is not always supportive of women as equals, the law provides the foundation on which we can strive to succeed.

The other night my husband and I attended a first-time screening at the Mill Valley (California) Film Festival. What better way to forget about The Terminator-turned-governor than go to the movies? The movie was “Afghanistan Unveiled”, a documentary by and about Afghan women. This is a serious and sad story by and about the women in Afghanistan who have been devastated by the Taliban era and then virtually forgotten since the U.S. invasion. The audience cried with the interviewers as they talked to Hazaras women living in caves with no food except lentils, no money, no fuel, and almost no water. The victims of the Taliban’s ethnic cleansing, all their male relatives except the youngest boys had been murdered, often in front of them. Security is not good enough to begin to build small businesses, though the women said if they could be given looms they could support themselves and their families, which often included many adopted orphans. In another part of the movie, a woman risked her life to tell about running away from a forced marriage; “honor” killing is rampant in this country.

For several years, Shelley Alpern has led an effort by Trillium Asset Management to find ways for socially responsible investors to have a positive impact on abused women throughout the world. Afghanistan has been a special case because of the courting of Taliban by Unocal and the extreme and overt abuse of women by that regime. Under intense pressure, Unocal and other U.S. companies eventually stopped dealing with the Taliban. After the attack on the World Trade Center, the United States threw them out of power, but not out of the country. The problems for women, especially away from the cities, have often been exacerbated. The United States has failed to deliver promised aid, so horrible poverty combines with a devastated economy and a nonexistent infrastructure to render their lives hopeless.

There are few ways investors can directly impact the fate of these women except by donating money to the relief organizations who are trying to help. In the future, Afghanistan would be a perfect place for micro-lending to women like Accion International does in Central and South America or Grameen Bank does in Bangladesh, but now there is no security for aid workers in this country. We are, however, entering the time of year when many people think about gifting either cash or appreciated stock. Some of the non-profits in Afghanistan include the Asia Foundation, which produced the film “Afghanistan Unveiled” with The Afghan Media and Culture Center, the U.S. Department of State and USAID. The Asia Foundation is trying to rebuild a large girls’ school in Kabul. National Geographic has established a fund to assist Afghan women and girls unable to attend school under the Taliban. There are those working on the issue of self-sufficiency in food, such as the International Center for Agricultural Research in the Dry Areas.

It was good for me to see this movie at the same time that California elected an “action hero” and Mr. Universe as governor. It put things in perspective.

“On moral choices and money”(A)

I am one of those mindless consumers who will read any book Oprah puts her name on. The reason is simple: I have never read an Oprah book I hated. I had not, however, had any experience with “O: The Oprah Magazine” until a recent column by Suze Orman dissed socially responsible investing. In the magazine column dated August, 2003, with the by-line “On moral choices and money”, Suze mistakenly states that socially responsible investing involves lesser returns. She then counsels her readers to invest “in a top-flight fund that has the potential to make you a lot of money regardless of its social screens” and then “donate some of your profits to a cause you believe in”. This is a sad, wrong, and out-of-date view of socially responsible investing. Since the women of Trillium Asset Management agree that we admire Suze Orman and what she’s accomplished for women in the world of finance, we’d like to change her mind.

When I first started talking to people about socially responsible investing in the late 70′s and early 80′s, I used the simplistic metaphor of a lemonade stand. If people of a small town did not have the option to invest anywhere but in that town, would they choose a lemonade stand founded by local people or a switchblade factory that used child labor owned by people from another place? The options in my story offered equal returns. In real life, nothing is that simple, but the metaphor made the point that there are other factors that count besides profit. All things being equal, most people would choose the lemonade stand because it seemed to contribute more than just money profits to the town, whereas the switchblade factory actually did damage. On some fundamental level, people understood that the process of making money mattered.

Over twenty years later, that metaphor needs some refining. We know, first of all, that the prospective profits from socially responsible investing vs. other “top flight” funds are potentially equal. Those collateral benefits or damages defined in the original story as food and equal opportunity versus violence and abuse of labor are obviously overly simplistic. In my experience, no company is all bad. No company is all good, either. The truth is that investing, like life, is complex. Like life, it is also a process where many choices matter, and where there are multiple opportunities to influence many parts of the outcome.

Some years ago, a member of the SRI professional community coined the phrase “doing good while doing well”. The possibility of doing good and well at the same time, we know now, is beyond argument. The factors that leverage financial performance are many. Manager competence, timing, style, and external influences out of the control of the investor or the manager can have huge impact on the results of an investment. Not much discussed is the very important fact that most investors are really bad market timers, tending to panic at the bottom and follow the herd into over-priced assets at the top.

Whether or not a fund is leaving out some group of possible investments can cause a portfolio to behave differently from the indices that have been constructed to proxy the markets. This is the Wall Street definition of risk that is quoted so widely, referring to “screened” portfolios. What is rarely mentioned is that real risk – losing a significant portion of your money – is not at all greater with screened funds. Most social investment funds, when analyzed by style, indeed do NOT exhibit increased risk characteristics (by this definition) relative to non-screened funds. And as to performance, 76 percent of the largest socially screened mutual funds (those with $100 million or more in assets) achieved the highest rankings for performance from either or both Morningstar and Lipper for the one- and/or three-year periods ending June 30, 2003.

So if you accept that we can, in fact, do well with “screened” portfolios, what’s left in the decision-making process that Suze Orman so quickly dismisses? The other half – doing good. Suze posits that we can make money any old way and then give our profits to something we think makes a contribution to society. She leaps over the concept that shareholders in major corporations can, though active input, actually influence corporate policies. Many, many examples of this exist on Trillium Asset Management’s web site or the web sites of the ICCR, the Social Investment Forum, CERES or the many members of the Forum and CERES.

Bottom line, I have a suggestion for Suze. Invest in a diversified portfolio of the excellent socially responsible mutual funds that use their role as shareholders to exert influence in corporate policies and processes, and then also give some of your profits to charitable causes.

Mosaic(A)

Over a cookout on the Fourth of July, a time for reminiscences, I talked with my family about the place I grew up, rural Western Massachusetts. This pretty part of the world is physically unspoiled and idyllic in many ways. My husband and I spent a recent weekend hiking around the lush woods and hills (called mountains, but none over 2,000 feet), spotting birds and slapping mosquitoes. As a teenager, though, I thought of it as parochial and mean-spirited, because when I returned from college in Boston I often heard sarcastic and hurtful comments about the “big city.” The cookout conversation this Fourth wandered to people we know or had met who had not been out of the city of Boston, or the state of Massachusetts, or New England, or the U.S. We wondered how anyone with no first hand knowledge of the rest of the world can possibly make intelligent decisions about foreign policy, because each and every American is purporting to know something about the U.S. as a global influence when they cast a vote in a Federal election.

In mid-June I was privileged to be able to visit the tiny studio of WorldLink TV in San Francisco. This amazing satellite station started on a shoestring budget in late 1999. Among other programming dedicated to global understanding and conflict resolution, it carries “Mosaic”, TV news programs produced by national broadcasters

throughout the Middle East. The news reports are presented unedited and translated, when necessary, into English. While we were in the station in San Francisco, we met Israeli and Palestinian translators, busy with headphones and mikes. With the staff, we stared at monitors as they transmitted live shows from Germany, England, the Middle East and Australia. The world seemed very small indeed.

In the San Francisco area, my husband and I live in an apartment and almost never watch television. But immediately after returning to our East Coast home, we called the local satellite company and soon found ourselves in a remake of the T.V. commercial about switching from cable to satellite. The very eager guy who came to install our dish had to tromp around on our roof a while to find the place where trees were not between us and our friendly stationary satellite, but after a few hours of work we were live.

The first program we watched on WorldLink was Czech with English subtitles. Touring folk singers drove around the countryside like ancient troubadours, singing to and with people from villages, refugee camps or the cities. In a particularly destitute area, one of the performers hesitated, repeating “Look at them!” over and over. She was told “They’re people just like you.”

As the country follows the Bush tour through Africa, media focuses on pictures of the President, his entourage and various local leaders. How would local T.V.stations cover the visit, and what if we could see behind the scenes to tales of AIDS and famine like the story in the Wall Street Journal on July 9? What would this country be like if people occasionally watched a folk singer in a refugee camp in Czechoslovakia instead of Sex and the City or flag-draped Fox News? I wish every voter could see what we now are able to see through our little satellite dish — an insider perspective of what it feels like to be an Iranian, or what the U.S. looks like from Germany or Africa. I believe it would make a difference.

“Tough Decisions”(A)

As a teenage camp counselor at 4-H camp, I was once given a whole cabin full of troublemakers because someone figured I could live through it, or at least not kill anyone else. The truth was, my personal survival strategy included being liked, even by little kids. Modern psychology would call it an affliction – this need to smooth out the rough edges of human interaction – and would posit that it derived from early childhood. In the Darwinian world of capitalist business, hard edges and the ability to make the “tough decisions” are considered qualifications for success, and peacemakers are seen as weak.

At any rate, regardless of whether peacemaking is an asset, an affliction, a liability or a weird selfish strategy or all of the above, decades of business management, social advocacy work and formal training have honed my knowledge of what it takes to resolve conflicts. It doesn’t always succeed, of course, and at times, chairing CERES was quite like herding friendly cats. The formula for resolving differences through peaceful conflict resolution (that also builds a relationship) is actually pretty simple, and a lot cheaper than F-117s or M-1 Abrams tanks. The first step is finding a common goal, like staying alive. You work from there to find strategies or incentives that are acceptable to all stakeholders.

At this macho point in history it’s tough to be a peacemaker, because once more power mongers have taken over the world. The formula for resolving conflict through force is more facile than the peaceful option: first you scare or trick the opposition (and possibly your own reluctant armies). You then overwhelm or kill, give an ultimatum to survivors (sometimes disguised as a choice), then maintain power through force, trickery or subversion. The opposition will hate you after you win, and if they have a chance they will turn the tables on you.

Although most of my conflict resolution work has been with companies and their stakeholders, in referring to power mongers I am not talking about companies. People in the better companies know that conflicting goals are inevitable in human life, especially those elements of life that involve commerce and scarce resources. They also know that conflict is more inexpensively and enduringly resolved through peaceful negotiations.

The power mongers I refer to are the politicians currently in power in this country. We have always tried, at Trillium Asset Management, to minimize political affiliations. We believe that we are more effective focusing on issues since politicians of all stripes come and go and are unpredictable allies. However, we have deep process issues with this administration. The Iraq war is only one of the hundreds of incidences, huge and small, when power tactics have been used to impose an ideology on the rest of us. As a professional who represents multiple stakeholder interests, I object!

Having objected, it is incumbent on me to suggest a solution, which I believe to be regime change at home, since the administration is not interested in the patient process of negotiating divergent views. The trouble is, having decided on regime change, however, it’s devilishly hard to imagine the alternative; the long list of contenders for head guy (President) need a good dose of conflict resolution themselves if they’re to represent a coherent alternative.

As someone experienced in herding cats, I have a suggestion. We probably don’t have the time or resources to bring the candidates off their egos to a consensus about what the opposition to the power mongers should look like, so I think all the Democratic candidates should become the next cast for Survivor. The show would last three months, and the winner would emerge with all his campaign money intact and his former opponents as new friends and supporters. And millions of people would watch.

Meanwhile, at Trillium Asset Management we’ll go along doing what we always do; making agreements with companies, working in coalitions, fighting for transparency, and representing multiple stakeholders using peaceful conflict resolution.

When princes meet!!!(A)

In these trying times, as investment professionals, we follow the volatile, nervous market, attempting to keep emotions out of the process of financial analysis. Emotional reactions are the bane of successful investing, and in these times emotions run high. This is a time when we share our clients’ despair over the seeming inevitability of war, the assault on environmental laws, the de-funding of many progressive organizations, encroachment on consumer and human rights protection, and on and on. It is a time when personal peace is attained best by turning off the news and taking a long walk in a natural setting. I have taken a lot of walks lately.

As Osama Bin Laden, Saddam Hussein and the war have monopolized the headlines for a year and a half, much has been happening at home and abroad that, in more normal times, would cause alarm. People are distracted and afraid, so it’s easy to forget other issues as the armies build.

There is some good news. Ironically, staying on track as an investment professional is made easier because the activist members of the socially responsible investment community have gained a great deal of new support (courtesy of Enron and others of the ilk) and are pressing ahead with record numbers of shareholder dialogues. On the sustainability front, CERES and the GRI move along with enormous global support, defining new metrics to measure a company’s human rights record even as armies gather in the Middle East. Compensation and other governance issues are being debated and won, and the S.E.C. passed a watershed rule requiring mutual funds to disclose their votes on proxies to their shareholders.

And on another front, I just returned from a Responsible Wealth conference in Seattle. Bill Gates, Sr., is working with Chuck Collins and the Responsible Wealth staff, as part of United for a Fair Economy, to battle the regressive tax reforms, extravagant executive pay, and other legislative initiatives that they see benefiting corporations and the already wealthy even as they place a greater burden on the middle class and the poor. This is very hopeful work, all undertaken in the name of fairness, compassion and sharing.

But progress on the corporate social front notwithstanding, the sad and frightening war drums still beat in the background of all we do. Over ten years ago, as the first Gulf War came upon us, we included a song by Tom Paxton in an issue of our newsletter. Hearing the song recently brought tears to my eyes again.

When Princes Meet

Tom Paxton, 1973

When princes meet, the poor little men must tremble.

In judgment seat, they speak of their wars – while great armies assemble.

Their armor shines to shame the sun – they move like gods they do resemble,

All bow their necks to iron feet when princes meet.

When castles rise, the poor little men must build them.

To charm the skies, they throw up the turrets where the great lords will them.

They dig the dungeons from the earth – and their brothers, wives and children fill them.

All those below cast down their eyes when castles rise.

God save the king! For he grants us leave to serve him.

His praises sing! And grant that we may deserve him.

Who counts the cost? The cattle and the men to be lost?

Tis no small thing, to serve a king.

When kings make war, the poor little men must fight them.

They must do more; they hold out their necks for great lord’s swords to bite them.

The sons of lords cleave through their ranks – in the hope some warrior king might knight them.

It’s what the poor little men are for, when kings make war.

Hide your cattle in the woods, Francois, the lord is looking your way.

Hide your women and your goods, Francois, they’re coming around to make you pay.

Hide if you can, poor little man, think of a prayer to say.

Hide if you can, poor little man, and think of a prayer to say.

In Costa Rica with LightHawk(A)

In late January, I was able to escape the War on Terror and other tensions by traveling in an official capacity to Costa Rica to attend a LightHawk http://www.lighthawk.org/ board meeting. Now, amid the guffaws from friends and colleagues, I am attempting to convince people that this was, in fact, a working trip. How else but on the backs of horses like Nano or Chico can you see the primary forest and visit a local Tica House for lunch while watching Toucans and King Vultures and Scarlet Macaws and Scarlet-rumped Tanagers and scores of other birds? LightHawk flies for environmental partners all over this country and Central America. On the rare occasions I am lucky enough as a Board member to tag along with them and see what they see, I gain the visceral knowledge only presence, sight and sound can evoke. It would be wonderful if everyone had a similar opportunity, for more reasons than I can count.

The Iguana Lodge on the magical Osa Peninsula http://www.iguanalodge.com/ is a long, long way from Boston, Massachusetts or San Francisco, California. In the cosmopolitan capitol of San Jose the terror barometer of the United States is far away, but bank guards clutch assault weapons as they scan the crowds of shoppers, tourists and office workers. The pedestrians, for their part, don’t seem to notice. Drug-related terror is, sadly, a way of life in Central America, as the countries provide a natural land highway from South American drug sources to users in the North. Costa Rica, with a stable government and great appreciation for their natural resources, balances economic, social and environmental issues better than most nations. But they are poor, like all Central American countries, and find staving off various assaults to be a huge challenge.

We flew with LightHawk volunteer pilots David Smith and Rick Durden across part of Costa Rica from and to the capital and around the Osa Peninsula, which contains the huge Corcovado National Forest. Along the flight routes, the tension between tourist development, huge private estates, corporate farming and the preservation of the integrity of the habitat and forests is obvious from the air. Palm oil, banana, pineapple and other plantations creep into wetlands and up hillsides into old growth (primary) forests. Developers from Canada or the United States purchase land and illegally bulldoze building lots in the theory that sooner or later they will find a corrupt official who will allow them to build. These red dirt lots glower out of the deep green forest like bloody scars. All this is easy to see from the air flying relatively low but almost impossible to pick up from the ground, where roads are few and bad.

LightHawk’s Costa Rican flying partners paraded through our Board meeting, briefing us on their activity and how LightHawk helps them through the gift of flight. The speakers represented tiny but courageous non-profits that accomplish awesome amounts of work. One, Fecon, has a terrific Spanish language web site at www.feconcr.org. The Green Macaw Project flew with LightHawk to create new park boundaries for protection of endangered Macaws. The Wildlife Conservation Society is working to hold back plantations and development to allow the revered Jaguar to maintain vital passage from the peninsula to the mainland. From air, the Leatherback Trust counts green and leatherback turtles by watching their wide “tracks” up the beach toward nesting sites. If the track doesn’t terminate in a messy patch up on the beach but goes back to the water it’s not a nest but a site rejection. On the Osa beach, five species of turtles lay eggs: the Green, Black, Hawksbill, Olive Ridley, and occasionally the endangered Leatherback Turtles (just spotted this last season.) The Iguana Lodge actually runs a turtle nursery with volunteer help. Last year they released 15,000 babies.

As we rode an open truck “taxi” to the airport on the way home, the driver stopped in the middle of the dirt road to let us watch Spider and White-faced Monkeys playing in the trees. We were leaving a country caught in the middle between the plundering of unchecked globalization and the advantages of sustainable development. We vowed to return.

Response to Wall Street Journal Editorial on Proxy Voting Disclosure Rule(Archive)

There are some things best kept secret, even though secrecy is a form of lying. In poker or war or football, it’s best to keep your next move from your enemy. When my husband and I ran off and got married, we kept it secret, and had a great time doing so. Usually you keep surprise parties secret, too. Parents keep their sex lives secret from their kids. And General Motors goes to great lengths to keep its product-testing secret from its competition.

The situations where secrets (or carefully contained lying) might be appropriate fall into three categories, as far as I can tell. Those categories include adversarial competition or conflict where strategic decisions require the element of surprise to win some sort of contest. The second category could be described as protection from an emotional event or circumstance judged to damage the receiver. The third would be saving up something for purposes of injecting happy surprise into someone’s life. Most other excuses for secrecy are lame, in my opinion.

One of the lamest of all excuses for hiding information is an excuse I’ve heard way too many times in my professional career. An all-too-common response to the request for information has been some version of the accusation that I (or my colleagues) represent “thinly veiled intimidation from activist groups”. This is a blatant attempt to inappropriately invoke Category #1 as a reason for secrecy. I want to step my five-foot two-inch female frame back and say “Aww, c’mon, guys, ME??”

The latest prize for lame excuse for secrecy goes to John Brennan, Chairman and CEO of The Vanguard Group and Edward C. Johnson 3d, Chairman and CEO of Fidelity Investments, who wrote the above descriptive phrase about activist groups. By any measure, these guys represent a GIGANTIC amount of investment clout. They joined together in an editorial (carefully pointing out that they usually “compete ferociously”) in the Wall Street Journal on January 14, 2003, denouncing a proposed requirement for mutual funds to disclose how they vote the proxies of corporations whose stock they hold. These powerful men attempted to create fear (a proven great motivator) of “activist groups” who are looking to “intimidate” and “distract investors from more critical issues in judging funds”.

This is, quite simply, total hogwash. Transparency never hurt anyone by itself, although, as above, I’ve conceded that I would not recommend it for quarterbacks or submarine captains. The regulated shareholder proxy system injects some small measure of stakeholder influence into the governance of the corporations that, you could say, increasingly rule the world. For investors who own stock through a vehicle like a mutual fund to be kept in the dark about this process is completely unnecessary. To say that giving them the information would “distract” them is insulting.

Read carefully, though, the editorial reveals what I believe could be the true motivation behind the letter: profit margins. Mr. Brennan and Mr. Johnson point out that there would be a lot of work that someone would have to do to sort through the proxies that come through their systems. They even made an attempt to quantify that work to 4,000 pages of data per mutual fund. They implied that the “burden” would shift back to the shareholders; but really, the burden of shifting through the paperwork would lie with the mutual fund itself, and that would cost money. It’s simply cheaper to keep this voting undisclosed. I certainly hope there is no other secret ulterior motive.

In an age of investor cynicism, daylight or transparency is more important than it has ever been around issues of corporate governance. Trust is impossible to build on a foundation of suppressed information, and trust is nothing less than the heart and life blood of our market. The cost of secrecy is infinitely higher than the cost of processing 4000 documents. Socially responsible mutual funds, much smaller than Fidelity or Vanguard, already disclose their proxy voting to their shareholders. The self interest of financial managers should not overwhelm the right of the public to know.

About Thanksgiving and Just Plain Giving(Archive)

Given the headlines, it’s hard to feel good this year. We are limping our way through the holidays, watching the stock market for continued life. We are scanning the parking lots of malls for evidence of improved consumer sentiment, holding our collective breath at the prospective costs of what seems to be an inevitable war. We are wondering where the service cuts will come to allow tax reduction at the same time as the shadow of this new cost looms.

The only way I can personally pull myself out of a bout of self-pity is by counting my blessings. That is unbelievably sappy, I fear, but it’s totally true. That’s because for most of us, feeling good is a relative thing. We feel good about our lives when we favorably compare them against our fantasies or our neighbors or what we see on television. The trouble is, our fantasies got a bit unrealistic and ahead of themselves in the period just before the tech bubble burst.

“The World Values Survey, coordinated by Ronald Inglehart of the University of Michigan, since 1981 has sampled the changing beliefs and happiness levels of people in more than 60 societies representing 75% of the world’s population. One surprising principle emerges: an increase in wealth per head of population makes a big difference to the happiness level of the poorer nations but has little impact on those that are reasonably well off.”

People who are really poor can be made happier with just a little more money, but people who are rich (we’re all relatively rich here in this country) tend to level out; other things are required beyond more wealth to cause happiness. “The conclusions of Ed Diener of the University of Illinois at Urbana-Champaign are decidedly folksy. He lists good friends and involvement in activities that we enjoy as important keys to happiness. Folksy it might be, but there may be something to it. As studies show that ever-increasing wealth does not create ever-increasing happiness, more people will turn to the “post-materialist” values of community, belonging and self-expression.”

So here we are, on Thanksgiving with unhappiness and fear rampant, especially in the progressive community. I would posit that it would make each of us feel better to engage in the act of giving. Just when we’re feeling poorer as individuals, (or at least, since 1997 or so when the market was where it is now) we should test the theory that reaching into our pockets to share our wealth will give us a sense of community, of empowerment, and possibly of happiness.

There has not been a greater need in decades. Social services, the government is telling us, should be performed by private organizations and non-profits, not by a bloated central government. The theory is that if you give back taxes, people, always generous, will support this volunteer labor force. People ARE generous, but in spite of volunteer time given and donations made, this year it has not been nearly enough to keep non-profits of all kinds from suffering serious income shortfalls as foundations and benefactors cannot even honor previous commitments. The stressed army of volunteers and the quasi-volunteer relatively underpaid employees of these organizations need our help.

Trillium Asset Management gives all of our employees time to work with non-profits each month. Many of our employees take advantage of this opportunity. We are sharing the list of these groups and a few stories with you, and we hope that you can find resources to share with one or more of these organizations, or one of the many, many others that are so deserving in your world or neighborhood.

For the Holidays this year, we wish you all happiness, peace, courage and generosity of spirit even as we count our blessings.

War, Petroleum and Investing(Archive)

October, 2002

For socially responsible investors, this year has seemed like torture. On the financial side, the equity markets have written themselves into legend, have already matched the slope and scope of the decline in ’73 and ’74, and now are poised to challenge the length of the bear market of World War II. But the torture aggravated by the stock market becomes exponentially more intense as the social goals for which we strive suffer almost daily setbacks. The seemingly inevitable War with Iraq heads the list of disturbing events, of course, all the more frustrating because we feel there is nothing we can do about it. We feel helpless.

Under the new Bush Doctrine, our country reserves the right to start a war without having been attacked if another country appears to threaten “our interests” in the opinion of the President alone. There is no question that “our interests” is a euphemism for petroleum and gas.

The United States consumed 19.6 million barrels of oil a day in 2001. Over half of oil consumed was imported. About 17% came from Saudi Arabia, 28.6% from the Persian Gulf, and (get this) 8.5% from Iraq[1]. In 1998, the 18.92 million barrels consumed amounted to about 40% of our total energy consumption. Natural gas came in second with 23.2% and coal third with 22.9%. In 1998, only .07% of our total energy consumption came from solar installations.

In the ‘90’s, Trillium Asset Management and others fought Unocal’s ambitious gas pipeline project in Afghanistan because it required collaboration with the cruel and corrupt Taliban. Unocal pulled out in 1998 after the U.S. bombed the supposed hideout of Osama bin Laden. Here’s a quote taken from the Hong Kong based Asia Times from October 6, 2001:

UNOCAL then stated that the project would have to wait until Afghanistan achieved the peace and stability necessary to obtain financing from international agencies and a government that is recognized by the United States and the United Nations. “The coalition against terrorism that US President George W Bush is building now is the first opportunity that has any chance of making UNOCAL’s wish come true. If the coalition succeeds”, Raghavan (a strategic analyst with the Indian army) said, “it has the potential of reconfiguring substantially the energy scenarios for the 21st century”.

Ironically, even recalcitrant Exxon Mobil has recently acknowledged that global warming exists and is a threat to the planet. Yet there is no movement whatsoever from politicians obsessed with a “regime change” in Iraq to build energy independence in this country and at the same time attack the inexorable progress of planetary warming. This seems to many of us an obvious and huge contradiction. Spending hundreds of billions of dollars on military action is not the way we will wean ourselves from dependence on the Persian Gulf. Finding new ways to provide and conserve energy is.

Socially responsible investors often try to better align their portfolios with their social goals by investing in the stock of companies producing or using alternative energy technologies or promoting energy conservation. Absent tax and other reforms to lower subsidies to oil companies (such as oil depletion allowances) there is no level playing field and no room for fledgling technologies to grow.

So what can be done in this time of crisis? Several things:

Refuse to be consumed by fear and pre-occupation with the War. If you have strong anti-war sentiments, write letters, demonstrate, or donate time and/or money to peace organizations.

Do not buy into the idea that to resist war is un-American. To stay quiet and not participate in debate is un-American.

Initiate or support shareholder resolutions that call for corporate sustainability plans, investment in alternative energy technologies, or clean and fuel efficient vehicles.

Support the Global Reporting Initiative (GRI) to shed daylight on corporate practices and policies

Support CERES Sustainable Governance initiative to promote sustainability plans and oversight by Boards of Directors

Start a war against global warming.

Write letters to your politicians or even to companies demanding energy conservation subsidies from the government. We spend billions even in peacetime protecting our energy “interests” abroad…if we divert even a fraction of that money toward conservation we’re on the road to independence.

Look for stocks in companies that will be involved in the development of hydrogen technologies. Some think hydrogen will revolutionize energy.

Above all, find something you can do, even if it seems like a small thing. Socially responsible investors have been picking up more and more support in our effort to influence corporate policies; it’s not the time to lose heart. In the midst of all this angst and a seemingly endless supply of bad news, action is great therapy. I’ve used this quote from Margaret Mead before, but I think it’s worth repeating:

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it’s the only thing that ever has.”

[1] This data comes from the Energy Information Administration, U.S. Bureau of the Census and Department of Energy.

The media “spin” is that the larger corporate order is fine(Archive)

The Bush Administration describes the crisis of confidence in the nation’s financial institutions as a morality play in which good guys bring evildoers to justice. Their media “spin” is that the larger corporate order is fine; it is just a rotten apples problem. The more complex reality of distorted institutional priorities and financial incentives hardwired into our capital markets disappears from our viewing screens. Instead we are presented with a “story line” in which John Ashcroft’s Justice Department enforcers are cast as the “good guys” riding into the lawless “village” of Wall Street to subdue the “evil doers” who have stained the virtue of capitalism.

In each act of the play a different corporation takes center stage; Enron, WorldCom, Global Crossing, et. al. In each instance the story line never varies. The dots are never connected. In fact they are simply ignored. Instead we are given a villain du jour to hiss at. One day it is Enron’s Kenneth (aka “Kenny Boy”) Lay the next it is his slicked back sidekick Jeffery Skilling. At other times the media puts up Gary Winnick of Global Crossing or Bernard Ebbers of WorldCom. At this moment Martha Stewart, because of her iconic status is being singled out as a special “fall gal” despite the comparatively paltry size of her alleged ill gotten insider-trading gains in comparison to the aforementioned individuals. She is an especially tempting target because a successful prosecution of her will send the clearest message to the masses that justice has been done on Wall Street, regardless of the truth.

The larger problem is that the line between legal and illegal behavior in many of these cases is a thin one at best. The real problem is not a simple tale of good and evil. President Bush emphasized this complexity in defense of his own behavior as a Harken Energy insider. Of course he then went on to say that he would unrelentingly punish anyone who actually breaks the law. But if much of the manipulation that is causing the current crisis is a result of now legal exercises in “business judgment,” then simple morality plays are misleading. The real threat to outside investors is the legal manipulation of the securities market that current law permits. The recently enacted Sarbanes-Oxley Act only scratches the surface of this problem.

Despite this more important story, the popular press will be spun with contrived “perp walks” staged by the Justice Department in which once highflying executives and celebrities will be brought to their arraignments in handcuffs. At the same time an Administration and Congress that relies on large corporate donations will fight tooth and nail behind the scenes to resist the thorough reform that investors sorely need.