Amazing how Amy Domini's placing in the Time 100 Influential People has presented an opportunity to raise the level of discussion of SRI. You can hear Amy Domini and Ethical Investing Story aired: Tuesday, April 26, 2005 on Here & Now on NPR.
Of all the American things I love, from Ben & Jerry's to The Simpsons to Puget Sound, both NPR, and its TV cousin PBS, are true modern day treasures for Americans. Sad though that PBS has to pitch annually to its federal overseers for 15% of its budget, and to raise the remainder from its listeners. Can it be far from a subscriber model on Sirius or XM radio, available around the world?
As a South African I would differ with Ms Domini re the power of SRI to change events in South Africa. growing up there as a privileged middle class White African, I was aware how businesses thrived. Like with the recent experience in Serbia and Iraq - the only thing that sanctions achieve is to create a very powerful balc market, because at the end of the day, at the individual level, each of us is dominated by the demands of the market and the money that drives it.
Most of the abnormal society I discovered was not through the lack of certain goods, but in understanding the political and cultural history, the lack of international sport and cultural entertainment brands. It was more important to young SA that the Springboks could not tour, and U2 played in Mbabane and Harare not Durban or Cape Town (check their Rock 'n Roll Hall of Fame induction). Economic sanctions did play a role. But political and cultural sanctions deserve a major share of the limelight.
Good to see Tim Smith finds a mention again (see An Activist Returns to South Africa Published, Fall 2001) ! Still no acknowledgement of the role of KLD, even though Amy founded it with Steve Lydenburg and Peter kinder in the garage of the latter's married home in 1988! Things must really be bad for KLD-Domini relationship. It seems to me that more effort should be made to present the stories of Peter Kinder and to hear from Steven Lydenburg about the future of SRI. In comparison, the website gives ample attribution to KLD:
Creation of the Domini 400 Social IndexSMThe index was created by the social research firm of KLD Research & Analytics, Inc.(KLD). KLD began work on the Domini 400 Social IndexSMin late 1989. It started officially tracking the Index on May 1, 1990 and has monitored the Index's performance since then. The Index was created to fill four primary needs:
· To answer the question of whether social screening carries an inherent financial "cost";
· To provide a socially screened equity benchmark;
· To communicate the standards of mainstream social investors to corporations and the general public in a viable format;
· To provide the basis for a screened, indexed investment vehicle for investors.
· In creating the Index, KLD employed a combination of exclusionary and qualitative social screens.
2 points from Amy's discussion:
1. The simplification of the SRI question into the questions like those by Rev Sullivan in the early 1980's (the Sullivan principles) - for example, how many employees in senior positions in SA are not white - points to the classic simplification that all investors enjoy intuitively. This ties into the point from my blog 19 Apr: is the future of SRI in the "Dummies Guide" approach, simplifying so it can be understood quickly by hurrying and avaricious traders?
2. No mention of how companies choose to reflect the Domini stamp of approval. I have tracked two companies lately that reference the listing on the Dow Jones Sustainability Index and FTSE4Good, but not Domini 400. I wonder what better marketing of the brand could have achieved more? While clearly famous in the Boston area where Here & Now is presented, the plain distribution power of the media- and financial-information based indices is ultimately more persuasive in the marketplace, and frankly may have bigger brand power.
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