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Financial reform, community investing, and shareholder advocacy
are all relevant topics for sustainable and responsible investors.
While financial reform has not yet been signed into law, we saw progress this
past month as a financial reform bill passed in the Senate. Now we can hope
that many of the reforms SRI investors lobbied for will survive reconciliation
with the house bill. See below for an indication of what one prominent SRI
organization (that Goodfunds is a member of) thinks of the bill coming out of
the Senate.
Community investing is one of our SRI strategies.
Check out the story below from Ode Magazine featuring Calvert Foundation, an
organization that most Goodfunds Wealth Management clients include
in their investment plans to earn a financial return while having a positive social
impact.
Shareholder advocacy, activism, and proxy voting
remain some of the more powerful tools for socially conscious investors. Since no
company is perfect, these strategies push for companies
to improve their environmental, social and governance (ESG) policies
and practices. The article below on advocacy efforts with Chevron is indicative
of the challenges investors face, but also the progress that
is being made. (Last I checked, none of our clients' accounts owned Chevron. But some
large institutional investors such as foundations, endowments, and pensions do,
and they are pushing for improvements in ESG practices on behalf of their
respective stakeholders.)
Let us know what's on your mind these days. It is our pleasure to serve you and
we look forward to speaking with you soon!
Best Regards,
Eric Smith, CFP®, AIF®
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 Social investors pleased with passage of key financial reforms...now on to Congress
Last month, the Social Investment Forum (SIF), a membership association of professionals, firms, institutions and
organizations
engaged in socially responsible and sustainable investing (SRI), congratulated the Senate on passing a strong financial reform bill-the Restoring American Financial Stability Act of 2010. The bill will foster greater accountability and oversight in America's boardrooms by granting shareholders new rights to remove poorly performing directors and to nominate alternative candidates. In addition, the bill gives stockholders an advisory vote on executive compensation or a "say on pay" at all U.S. publicly traded companies and grants the SEC self funding, The legislation also provides for new regulations for derivatives and hedge funds and greater oversight of credit rating agencies, all items that the Social Investment Forum had identified as legislative priorities.
SIF CEO Lisa Woll said: "The most recent financial crisis highlighted for all Americans the urgent need to instill greater discipline among corporate boards and in financial markets. Majority voting, proxy access and 'say on pay' will help address these failures and strengthen America's financial markets. SIF members have been filing shareholder proposals at U.S. companies requesting majority voting standards and a 'say on pay' for more than a decade, so this is a very welcome victory for the socially responsible and sustainable investment community."
The bill also creates a Consumer Financial Protection Bureau within the Federal Reserve that will crackdown on predatory and other unfair lending practices targeting American consumers. SIF members have been champions of community investing and fair lending practices for decades and also laud the passage of this landmark provision.
Woll added: "We will be watching closely, and remaining active, as the bill goes to conference with the House and will seek to ensure that provisions that weaken the bill are not added."
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Profit with a purpose
 Community investing is one of the strategies utilized by sustainable and responsible investors to blend social impact with financial return.
One such organization that helps investors participate in community investing is Calvert Foundation, a Washington, DC based non-profit that loans out investors' money to non-profits working on issues such as affordable housing and microfinance. Investors can earn up to 3% interest on the money they invest.
Manna, one of the organizations that Calvert Foundation loans money to, was recently featured in Ode Magazine. Here's an excerpt:
"
From the moment she arrived in the U.S.
from Trinidad and Tobago
in 1994, Sherane Berkeley dreamed of owning her own home. But as a single
parent with a young son, it wouldn't be easy. A lousy credit score and little
sense of how to go about getting a loan meant Berkeley needed help before
making any move. Fed up with her inner-city neighborhood in Washington, D.C.,
she set out to get it.
In 2004, at a weekly class held by Manna, a D.C.-based group that lifts
low-income families onto the property ladder, advisors helped Berkeley budget her money, polish her credit
score and learn the steps to owning a home. And when a modern brick-and-siding
home renovated by Manna came onto the market in 2007, they offered her
favorable terms to buy it."
"Friends say, 'You
don't come out anymore,'" says Berkeley,
39. "I say, 'No, I have a home now. I love it.' The Caribbean Blue in my
bathroom reminds me of back home." Berkeley-and the hundreds of others helped
by Manna-isn't alone in profiting from the organization's work. Equally
gratified are its investors."
Full Story: http://www.odemagazine.com/doc/70/Profit-with-a-purpose/
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Oil contamination in Lago Agrio, Ecuador, November 2007 (Photo by Julien Gomba)  | Turmoil over Ecuador oil contamination at Chevron
shareholder meeting
Last week, many shareholders were barred from entering the Chevron annual shareholder meeting in Houston, allegedly due to their opposition to Chevron's operations in Ecuador.
Shelley
Alpern, vice-president at Trillium Asset Management Corporation
said, "I attend several shareholder meetings every year and I have never
seen a company deny entry to legal proxy holders. This is outrageous and
reflects very poorly on our company's respect for the laws that govern
our
proxy process. The shareholders in attendance today should stand
forewarned not
to say anything critical or it could be you next year."
A report by a court appointed team in 2008 concluded that toxic oil production process waste dumped into unlined pits in the rainforest was the cause of 1,401 cancer deaths in the region.
An ongoing legal battle is underway in Ecuador pitting 48 Ecuadorian Indians and farmers against the oil company.
Chevron stockholders voted on nine proposals and none of those regarding the
environment received a majority of votes. In the vote that gathered the most
shareholder support, 26 percent of the votes cast went to the stockholder
proposal regarding the appointment of an independent director with
environmental expertise.
A significant reason these kinds of issues sometimes don't receive a majority of the vote is that corporate management all too often recommends shareowners vote against these good ESG resolutions, and too many investors just plain don't bother voting their shares. (Proxy voting is included in Goodfunds Wealth Management's FAFN-managed account services.)
Source: Environmental News Service
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Eric Smith, CFP®, AIF®, Senior Wealth Officer
Alice Smith, CRPC®, Financial Planning Specialist
Ryan Jones-Casey, AAMS®, Financial Services Specialist
Goodfunds Wealth Management
Sustainable and responsible investing services since 1986
206.782.1205 | 800.940.1747 | www.goodfunds.com | Seattle, WAMember, First Affirmative Financial Network
Securities & investment advisory through KMS Financial Services, Inc.Although
the materials referenced in this email may contain investment advice or
recommendations, they are the opinions of the author, fund, or manager
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