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ETHICAL INVESTMENT VOTING FOR THE FUTURE affecting the way people cast their vote, it’s increasingly affecting the way people invest their money.” The Financial Review (8/8/90) 66 G reen consciousness is not just Are you supplying sub-machine guns to South Africa, under- writing oil spills in Alaska, or bank rolling pollution in Kakadu National Park? Are you promoting Australia’s consumption of alcohol and tobacco, or evicting the aged from their life-long homes? Are you paying for the petrol in a woodchipper’s chainsaw, or supplying torture equipment to the third world? No....? How can you be sure? When you look at the way you manage your money, you'll see that you are constantly voting with your cash. A vote is an expres- sion of will, choice or approval, and every time you make a pur- chase, a deposit, or an investment, you are voting for something. Ethical investment refers to investment in accordance with ethi- cal or moral principles. The ethical principles may relate to politi- cal, social, religious or environmental matters. The list of exclu- sions is as wide as there are viewpoints and a single ethical fund is unlikely to meet the needs of all ethical investors. People are becoming increasingly aware that if they’re to con- tribute to cleaning up the environment, then it’s not enough to ‘consciously’ vote only when you're at the supermarket. If you’ve got your money in an ordinary bank or money market fund, superannuation fund, or unit trust then the chances are that some of it’s working for the very things you don’t really sup- nart port. Finding out and directing where your savings an investments go is ultimately a far more powerful way of affecting state, national, and global affairs. This was well demonstrated last year when the oil spill in Alaska from the Exxon Valdez cause 10,000 customers to send their chopped up Exxon charge cards back to the company, and 7% was knocke off its share price at a time when other oil shares were rising. The Financial Review (7/2/89) reported that American socially responsible investment is overwhelmingly con- cerned with boycotting companies that do big business in South Africa. The effect has been to drive up the cost of capital to America companies operating in South Africa, among others - Ford con- ceded when it announced that it was selling its South African sub- sidiary. This is another example of how individual collective actions were able to change the way a company operated. Companies rely on the money shareholders provide to carry on their business. While some of that share-buying cash comes from private holdings - in Australia, 5% of shares in listed public com- panies are held by small investors - insurance companies, banks, superannuation funds and other managed investments dominate public company share registers. It is estimated that by the year 2000 superannuation funds alone could hold 50% of the share list- ed on the Australian stock market. As members of superannuation funds, investors in trusts, policy holders or account holders with banks, we are all players in the investment world. Where are our funds invested? More to the point, what are we voting for with our cash? As listed in the 1989 Annual Report for Elders IXL, the twenty largest shareholders included the AMP Society, State Authorities Superannuation Board, National Mutual Life, and Mercantile Mutual Life. The twenty largest shareholders of North Broken Hill Peko Ltd, included the AMP Society, National Mutual Life, State Authorities Superannuation Board, GIO, Colonial Mutual Life, and Prudential Assurance. The twenty largest shareholders of ICI included National Mutual Life, the AMP Society, NRMA Investments, GIO, and Mercantile Mutual Life. What about your bank? In his article “Banking From the Heart”, Robert Rosen points out that the big three (NAB, Westpac and the ANZ) have strong trading connections with South Africa, and close links with major uranium, timber and agri-business interests. All three have through interlocking directorates and other networks, strong ties with all major sectors of the Australian economy. Overseas there a few exceptions to the run-of-the-mill bank; the Ecobank in Germany set up by the Green Party, the South Shore Bank in the US which has played a key role in revitalising the depressed South Shore area of Boston, and the Triodos Bank in Holland. The US also has an American Native People’s Bank, the Womens’ World Bank and the Bank for Socially Responsible Lending plans to open this year in Brooklyn. In Bangladesh, the Grameen Bank has been remarkably success- ful in lending money to the poor (mainly women) to set up small businesses. In Australia there are no “ethical” banks but there are Credit Unions, Cooperatives and Loan Funds that do have ethical criteria. Continued on page 34 NEXUS - 13 by Amanda Falconer VOTING WITH YOUR CASH A FORCE FOR SOCIAL CHANGE FEBRUARY 1991 *- YEAR BOOK WE ARE ALL INVESTORS WHAT ARE THE ALTERNATIVES?