Major investors have increased the demand for investment research identifying businesses involved in Sudan after worldwide attention on alleged genocide in the Darfur region. On Friday August 26, New York City Pension Funds began urging a shortlist of companies in their portfolio to review business ties to Sudan. Media coverage has included Time’s September 5 US edition “Who Speaks for Her? Rape is the weapon of choice in Darfur, but Sudan's government doesn't want to hear about it” and CBS television news magazine 60 Minutes on Sunday August 28 reporting on Darfur crisis in a segment titled “The Killing In Sudan”.
Dedictaed blog The Passion of the Present has logged more coverage of the issue and a number of NGO websites have sprung up specifically on the issue.
In New York, a judge on Tuesday August 30 permitted the Talisman Energy genocide case to proceed despite warnings from Canada and the US .In the lawsuit, Talisman Energy Inc. and the Sudanese government are accused of working on a plan for the security of oil fields as Talisman hired its own advisers to coordinate military strategy with the government. The oil giant is accused of participating in ethnic cleansing, confiscation of property, kidnapping and rape, according to LARRY NEUMEISTER Associated Press Writer, August 30, 2005.
In the US, pressure had been building on states to divest holdings in businesses active in the Sudan. Illinois was the first state to act, passing legislation in May of this year baring the state’s five pension systems from investing in companies that do business in the Sudan . At the time, two of the state’s five pension systems had approximately $1 billion invested in 32 companies doing business in Sudan. New Jersey, Maryland and California have also been active on the issue, with New Jersey becoming the second state after Illinois to act - and with a much faster exit strategy. The NGO Divest Sudan has identified 81 public pension portfolios with over $91 billion in assets exposed to the Sudan.
Harvard University decided to sell $4.4 million of PetroChina Co., a company engaged in oil exploration in the Sudan, in April 2005. Similar to the divestment movement targeting South Africa in the 1980’s and Burma in 1990’s, divestment from the Sudan is seen as an economic lever to bring about change in a troubled regime. Additionally, investors do not want to be seen to profit from the misery of others. Student-led divestment campaigns have begun on campuses including Stanford , University of California , Duke University and the University of Pennsylvania.
SRI firms are now scrambling to meet demand. Conflict Securities has positioned itself as a key player with its research in this niche with a product called Sudan Corporate Monitor. But questions are being asked about their ability to offer excellent information sourced only from public documents. Firms involved are not US-based because in 1997 Congress instituted economic sanctions against the Sudan due to its support of terrorism. The sanctions remain in force.
Wednesday, August 31, 2005
Thursday, August 04, 2005
Cox gets appointed; SRI community has doubts
I am watching with interest the first “live” appointment of SEC Chair when I am on board. It is a powerful position to replace William Donaldson and so the political forces have battled. I find it a little bewildering to try and identify the right traits in these "confirmation hearings". Wonderful to see democaracy in action, and especially where investor rights will be affected. But similar to the other hearings and Supreme Court justices hearings, how does the interviewing help. I guess like anbything we judge on past performance. Ironic in an industry where by law any description of investment performance must come with its "past performance is not predictive of future performance" caveat!
The good news is the winner seems to be politically astute. After being sworn in on Wednesday, 3 Aug. Cox managed to send a signal early: he said his first meeting with SEC staff was with Linda Thomsen, director of the enforcement division. Reuters headlined with “New SEC chief backs investors, plain-English push” Reuters News 4 August 2005 10:50 WASHINGTON. "She and her entire division will have my unstinting support," Cox told hundreds of SEC employees in a packed auditorium at agency headquarters appealed to SEC staffers to put investors' interests first, saying, "If investors ain't happy, ain't nobody happy." U.S. Securities and Exchange Commission Chairman Chris Cox, in his first speech as head of the agency on Thursday, said he would put investors first, renew a push to put SEC rules and disclosures in plain English and be tough on enforcement.
Lobbyists for industries affected by these issues will weigh in on them, but Cox warned: "No one is entitled to line jump and press their issues to the forefront."
Addressing speculation since his nomination weeks ago about whether as chairman he would be "pro-business or pro-investor," Cox said the U.S. Department of Commerce serves the business community and the SEC serves investors. It isn't necessary for the interests of investors and business to be in conflict."
On Monday, July 25, a number of SRI, public interest and labor pension groups had participated in joint media to bring attention to the confirmation hearings for 3 SEC Commissioners, including Rep. Chris Cox who has been nominated for the chairmanship. A prelim list of reporters that were on the call is below. The event featured Damon Silvers of the AFL-CIO, Joan Claybrook, head of Public Citizen, and Shelley Alpern of Trillium Asset Mgmt. The speakers focused on Cox's record, the urgent work still to be done by the SEC, and why these appointments are so crucial to maintaining the health of the US markets.
According to Tracey Rembert, Coordinator of Investor and Corporate Engagement Service Employees International Union Capital Stewardship Program, both Damon and Shelley were clear to say that most union funds and the SRI community in general have not opposed the candidate, but wait to hear what he has to say at the hearing, but that we were all troubled by media reports and a glance at his voting record over the years that seemed to run counter to investors' best interests. “Senate Banking Committee and staffers were interested in the diverse group of investors signing on”, she said.
The SRI effort ended up getting 42 signatories, as Domini and Ceres joined the action today. Public Citizen also released its report looking at Cox's voting record going back to 1989 www.citizen.org/documents/PC_Cox_Rpt.pdf
On the Media call:
American Banker Amy Thompson, Bloomberg Larry Arnold, Washington Post Carrie Johnson, BusinessWeek Amy Borrus, Los Angeles Times John Peterson, U.S. News and World Report Danielle Knight, Business Ethics Magazine Marjorie Kelly, New York Times Steve Labaton, BNA Rachael McTake, Congress Daily Molly Peterson, Common Cause Suzanne Goodman, Laborer Journal Linda Pricilla, Talk Radio News Kate, The Bond Buyer Lynn Hume, Dow Jones Judy Burns, Wall Street Journal Deborah Soloman, The Hill Alana Shore, Marketwatch Rob Schroeder.
The good news is the winner seems to be politically astute. After being sworn in on Wednesday, 3 Aug. Cox managed to send a signal early: he said his first meeting with SEC staff was with Linda Thomsen, director of the enforcement division. Reuters headlined with “New SEC chief backs investors, plain-English push” Reuters News 4 August 2005 10:50 WASHINGTON. "She and her entire division will have my unstinting support," Cox told hundreds of SEC employees in a packed auditorium at agency headquarters appealed to SEC staffers to put investors' interests first, saying, "If investors ain't happy, ain't nobody happy." U.S. Securities and Exchange Commission Chairman Chris Cox, in his first speech as head of the agency on Thursday, said he would put investors first, renew a push to put SEC rules and disclosures in plain English and be tough on enforcement.
Lobbyists for industries affected by these issues will weigh in on them, but Cox warned: "No one is entitled to line jump and press their issues to the forefront."
Addressing speculation since his nomination weeks ago about whether as chairman he would be "pro-business or pro-investor," Cox said the U.S. Department of Commerce serves the business community and the SEC serves investors. It isn't necessary for the interests of investors and business to be in conflict."
On Monday, July 25, a number of SRI, public interest and labor pension groups had participated in joint media to bring attention to the confirmation hearings for 3 SEC Commissioners, including Rep. Chris Cox who has been nominated for the chairmanship. A prelim list of reporters that were on the call is below. The event featured Damon Silvers of the AFL-CIO, Joan Claybrook, head of Public Citizen, and Shelley Alpern of Trillium Asset Mgmt. The speakers focused on Cox's record, the urgent work still to be done by the SEC, and why these appointments are so crucial to maintaining the health of the US markets.
According to Tracey Rembert, Coordinator of Investor and Corporate Engagement Service Employees International Union Capital Stewardship Program, both Damon and Shelley were clear to say that most union funds and the SRI community in general have not opposed the candidate, but wait to hear what he has to say at the hearing, but that we were all troubled by media reports and a glance at his voting record over the years that seemed to run counter to investors' best interests. “Senate Banking Committee and staffers were interested in the diverse group of investors signing on”, she said.
The SRI effort ended up getting 42 signatories, as Domini and Ceres joined the action today. Public Citizen also released its report looking at Cox's voting record going back to 1989 www.citizen.org/documents/PC_Cox_Rpt.pdf
On the Media call:
American Banker Amy Thompson, Bloomberg Larry Arnold, Washington Post Carrie Johnson, BusinessWeek Amy Borrus, Los Angeles Times John Peterson, U.S. News and World Report Danielle Knight, Business Ethics Magazine Marjorie Kelly, New York Times Steve Labaton, BNA Rachael McTake, Congress Daily Molly Peterson, Common Cause Suzanne Goodman, Laborer Journal Linda Pricilla, Talk Radio News Kate, The Bond Buyer Lynn Hume, Dow Jones Judy Burns, Wall Street Journal Deborah Soloman, The Hill Alana Shore, Marketwatch Rob Schroeder.
Rousseau helping CSR in 2005: McKinsey MD weighs in on CSR andshareholder value
The Product Group intern projects explored the McKinsey article this week What is the business of business? By building social issues into strategy, big companies can recast the debate about their role in society. Ian Davis, The McKinsey Quarterly, 2005 Number 3., It made the SIF discussion list by Thursday afternoon. It is worth reading, originally published in The Economist May 26, 2005.
I think it is material to SRI professionals ongoing discussions re. materiality, the role of CSR, and language to describe issues in analyzing corporate value. Read together with the recent Morgan Stanley/Oxford Analytica paper July 2005, my takeaways impacting SRI research philsophy and process are:
1. Exploring drivers for corporate behaviour and actions in a way that understands the tension of competitive companies in a dynamic market, legal and social structure.
2. Tension within a sector/industry as firms compete against each other, while being held to deliver for the common good.
3. Connection to innovation in trying to capture future opportunities.
4. Developing a lexicon that translates to a mainstream investment analysis audience.
The phrasing of the challenge to the firm and the need to address the social issues as strategic business issues is refreshing in an article written by a thought leader at a strategic consulting firm, and in the same week that Jeff Immelt is on the front page of Forbes "making money cleaning up the world" 08.15.05 Current Issue. The response by companies should be interesting.
Using some of this framework, perhaps re-stated in a way that corporates can better appreciate, may be some part of the next steps to presenting SRI-type research on CSR issues to the mainstream audience, and money managers in particular.
At the very least, it is another step in making investor relations personnel more sensitive to our analysts and their research questions. Hopefully we can develop the right products to capture some opportunities.
I think it is material to SRI professionals ongoing discussions re. materiality, the role of CSR, and language to describe issues in analyzing corporate value. Read together with the recent Morgan Stanley/Oxford Analytica paper July 2005, my takeaways impacting SRI research philsophy and process are:
1. Exploring drivers for corporate behaviour and actions in a way that understands the tension of competitive companies in a dynamic market, legal and social structure.
2. Tension within a sector/industry as firms compete against each other, while being held to deliver for the common good.
3. Connection to innovation in trying to capture future opportunities.
4. Developing a lexicon that translates to a mainstream investment analysis audience.
The phrasing of the challenge to the firm and the need to address the social issues as strategic business issues is refreshing in an article written by a thought leader at a strategic consulting firm, and in the same week that Jeff Immelt is on the front page of Forbes "making money cleaning up the world" 08.15.05 Current Issue. The response by companies should be interesting.
Using some of this framework, perhaps re-stated in a way that corporates can better appreciate, may be some part of the next steps to presenting SRI-type research on CSR issues to the mainstream audience, and money managers in particular.
At the very least, it is another step in making investor relations personnel more sensitive to our analysts and their research questions. Hopefully we can develop the right products to capture some opportunities.
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