investing

Does socially responsible investing help?

Research your funds

ProxyDemocracy.org was created to shed some light on the shareholder advocacy process of mutual funds, both traditional and SRI. Investors can uncover how active their funds are in the shareholder process -- and whether they support and vote with management or if they tend to vote against management recommendations.

"In creating PD we wanted to provide a free service that would help individuals participate in corporate governance, while putting pressure on institutional investors to do a better job as representatives," says the site's founder, Andy Eggers.

"Institutions pay a lot of money to have research companies tell them how to vote. This system doesn't work for individuals, clearly. Yet, there is free information out there that could help them -- us, really -- cast our votes and keep an eye on institutions like mutual funds and pension funds that supposedly represent us at shareholder meetings," he says.

At PD, investors can find out how their mutual fund has voted in the past and find ballots for upcoming meetings and how large institutions will vote.

At SocialInvest.org, investors can find mutual fund performance charts for all open SRI funds and sort them based on financial performance, screening and advocacy, proxy voting, account minimums and fund profiles.

To find out more about your funds, request the fund company's proxy voting guidelines. Many publish their guidelines online.

What can one person do?

Individuals have very little control over the actions of corporations. But corporations have a very large impact on the world. When people desire change, they can exert pressure by voting with their feet. Companies respond to money and pressure. The last thing they want is a falling stock price due to less demand for their stock.

Shareholder activism can have an impact. For instance, People for the Ethical Treatment of Animals, or PETA, works with companies on animal welfare issues. One of the most pressing issues they're focusing their advocacy efforts on now involves the way chickens and turkeys are killed.

"Controlled-atmosphere killing is the least cruel form of slaughter available for chickens and turkeys today," says Stephanie Corrigan, manager of corporate affairs with PETA.

"In 2007, we submitted a resolution to Safeway asking them to do a feasibility report on requiring their suppliers to phase in controlled-atmosphere killing, or CAK, and by 2008 they had purchasing preferences on CAK and have already started to serve some CAK turkey," she says.

A new site called Moxyvote.com allows advocacy groups such as PETA and Calvert Investments to publish their opinions on corporate ballots or current shareholder resolutions and lets shareholders vote alongside the groups with whom they agree.

"It doesn't solve the world's problems, but you can't step away from something just because you can't solve it. It's like voting: If no one does it, then we're in a worse situation than we are now," says Donald Cummings Jr., managing partner at Blue Haven Capital in Geneva, Ill.

When researching socially responsible funds, evaluate their screening criteria and shareholder advocacy to ensure their hierarchy of issues matches yours.

No one fund may be exactly right, but by ranking your priorities and investing accordingly, you could make a difference.

"Jump in the pool and see what you can do. A little bit of change is better than no change at all," says Cummings.

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