RURAL ROUTES/Margot Ford McMillen

Sustainable, Responsible Investing Can Be Profitable

In mid-March, the New Jersey Motor Vehicle Commission voted to prohibit a company from selling vehicles directly to consumers. This means that Tesla, the innovative auto company, which sells electric cars on the internet rather than in dealerships, has to comply to a long list of as yet unwritten but probably baffling regulations in the state of the ultimate baffler, Chris Christie. Two other states — Texas and Arizona — have similar pro-dealer regulations. In Texas, for example, buyers browse in a “gallery,” picking car colors on interactive computer screens that have no prices. They can’t get a test drive or even find out where to get the car serviced.

Ohio lawmakers are considering a similar embargo. Existing stores in Columbus and Cincinnati would stay open, but no new ones could be opened. To guarantee that the prohibition would pass, the Cleveland Plain Dealer found, lawmakers had received more than $100,000 in campaign financing from Ohio auto dealers.

These stories hit the papers just a few days before a bunch of curious Missourians, some of them staid and gray-haired college-teacher retirees, were meeting to discuss “how policy affects where retirement funds are invested.” This roundtable discussion was part of a series on socially responsible investing, hosted by the local Women’s International League for Peace and Freedom and KOPN, the public radio station. Thanks to my New Year resolution to learn how the stock market works, I was there, and the Tesla news, needless to say, provided a springboard for discussion.

Stock in Tesla has bounded from the 30s to the 230s in the last year. It is one of the darlings of investors in the socially responsible investment (SRI) set because if electric cars catch on, the petroleum industry could be put back in the box where it belongs. If you had an electric car, and you could charge it with solar or wind-generated electricity, fossil fuels could become a thing of the past.

The Missouri group had met to hear experts in what is perhaps the fastest-growing segment of investors, committed to environmental, social and governance (ESG) issues in investment decisions. According to the Forum for Sustainable and Responsible Investing, “From 2010 to 2012, sustainable and responsible investing enjoyed a growth rate of more than 22%, increasing from $3.07 trillion in 2010. More than one out of every nine dollars under professional management in the United States today — 11% of the $33.3 trillion in total assets under management tracked by Thomson Reuters Nelson — is involved in sustainable and responsible investing.”

We had learned that SRI investors include individuals, from average retirement account owners to very high net worth individuals, and institutions such as universities, clubs, pension funds, nonprofits and religious institutions. They are all embracing investments that bring their money into line with their values. There is, for example, no reason for a foundation granting funds for sustainability to own a share of Monsanto, even though they have a well-crafted sustainability statement on their webpage. And there’s no reason for peace activists to own a share in, say, Lockheed Martin, the number one military contractor in 2013.

Of course, in the US, it’s almost impossible to avoid shareholder companies that are involved with the military. AT&T, Dell, IBM, GE and dozens more household names are winners in the military contracting game, but you do the best you can. Or, maybe, you invest in your community, in the people you know and the land around you. Amazing but true, there are organizations working on this very issue. One of the members of our study group told us about Slow Money, investing in local farms. Will wonders never cease?

That’s hard to do in a retirement account, so our group was schooled in the mysteries of “screening,” where you list the categories you cannot, or can, stand to be associated with. Gambling, fracking, war, no. Human rights, consumer health, alternative energy, women in management, yes. After you make the list, with three categories — absolutely no, mostly no, yes — you search the internet for compatible funds and stocks.

One of our speakers was Sister Barbara Jennings, a nun that runs the Midwest Coalition for Responsible Investment. I had met her at the Monsanto meeting where I delivered a resolution asking the company to research the costs of (among other things) fighting GMO labeling.

Sister Barbara works full time gathering information to present to corporate leaders. Another speaker, Ron Freund, traced the development of his project to take tobacco off drugstore shelves in California. Encouraging shareholders to vote their proxies resulted in a lot of publicity and even brought school groups to the shareholder meeting. It didn’t result in a complete win in the Long’s Drugs chain as he requested, but years later Long’s was purchased by CVS; CVS has recently adopted the policy proposed over 10 years ago.

It takes forever to make the changes you want today, and that’s discouraging, but shareholder activism offers another tool in the toolbox.

For Tesla, building a network of recharging stations across California at present, the challenges are huge and they don’t need the hassle of government bans. But the news brought publicity, and that’s not a bad thing. Will they fight the ban? Will they figure a way around it? Stay tuned!

Margot Ford McMillen farms and teaches English at a college in Fulton, Mo. She blogs at progressivepopulist.blogspot.com. Email: margotmcmillen@gmail.com.

From The Progressive Populist, April 15, 2014