Wednesday, August 20, 2008

Ethical Investment Roadshow

Australian Ethical Investment Ltd. is doing a series of roadshows in Australia and New Zeeland. James Thier, Executive director, talked in Sydney last night (Tuesday 19 August 2008). He gave a realistic overview of ethical investment (and the different terms such as Socially responsible investing and sustainable investing), how it is intended to help the community and the environment and his company's superannuation and trust investment products.

James did a reasonable job of a difficult task of selling investments in the current negative financial environment. Like other investments, the value of Australian Ethical's have gone down recently. But most of the presentation concentrated on the long term gains the fund has made and the social and environmental value of the investments.

One question I had was about the mechanics of the AEI process. I have been an AEI investor for some years (even bought some shares in the company). One frustration has been the difficulty of making regular investments. With less ethical superannuation funds, after I fill in the complicated application form they give me a BPAY code. I can make an additional investment simply by making a BPAY payment through my bank. The BPAY code indicates who I am and what fund the money has to go into. There is no need to fill out any forms. AEI now allows BPAY for trust investments, but seems to still want me to send details of my payment separately for superannuation. This is an error prone and inefficient process.

James mentioned he had done a study overseas. A quick web search found that he was a 2006 Churchill Fellow:
Fellowship travel was undertaken from April 4 to June 6, 2007. The intent was to visit organisations actively participating in a variety of shareholder advocacy roles. These included the more traditional/corporate perspectives of investment houses through to activist undertakings of NGOs. A significant element in the mix is faith-based organisations, which are increasing willing to attend to matters outside their normally prescribed domain, such as climate change. In addition, there is a growing profile which sees the need to address policy formulation in the endeavour to effect real and lasting improvement.

The dimensions of this investigation were not only significantly different from what is often the case in Australia, but equally there proved to be considerable variation
within norms of the countries visited.

Sacramento – CalPERS is one of the largest pension funds in the world and a leader in corporate governance with respect to issues of shareholder value.
Boston – Attending the Ceres conference on Climate Change. Meeting with Tim Smith, Senior Vice President, after his move to Walden Asset Management to enhance their active proxy voting as a means to secure public and management attention.
New York - Interfaith Centre of Corporate Responsibility provides guidance and co-ordination on social issues to faith-based members and a broader constituency, including acting as a clearing-house for information on shareholder actions.
Amsterdam – Meeting Professor Harry Hummel of SNS who is pre-eminent in socially responsible product innovation.


Shareholder activism is a broad paradigm through which individuals or groups can exert pressure on companies to affect a particular corporate practice.

Provide procedural infrastructure/produce alternative products to enable new possibilities whereby Australians can influence corporate decision-makers in a concrete, non-confrontational manner
• Establish a framework/methodology for co-ordinating participants and institutional investors to act in a common interest
Consider an integrated approach to the often disparate programs of
corporates, NGOs and faith-based organisations

Implementation and Dissemination

Research findings will be disseminated through regular public presentations and in association with a broad range of networks – professional and community, as well as media contacts and via publications. Promotion to 40,000 people occurred through
newsletter and a keynote speaker at a Climate Change summit comprising hundreds of attendees, in July 2007.

Possibly new approaches to investment product formulation and manufacture. ...

From: Executive Summary, "To examine the mechanisms of shareholder advocacy, especially resolutions proposed at Annual General Meetings, used to improve the ethics of corporations and promote ecological sustainable and socially just enterprises", Report by James Thier, The Winston Churchill Memorial Trust of Australia, 10 September 2007
ps: I noticed that with his business suit James was wearing what appeared to be a pair of canvas and rubber walking boots. I don't know if this was to avoid animal products or against child labour for shoe making in third world countries, or just for comfort. If reminded me of an eminent IT professor who once gave a keynote speech at a conference. I was in the front row and so could see he was wearing hiking boots with his suit.

1 comment:

Ron Robins said...

Good to see your interest in ethical/socially responsible investing.

I got interested in ethical investing some forty years ago as I believed that when we invest in a company we share in the responsibility for the activities of the company as well as participate in the outcomes of the company's activities. Therefore anyone valuing their personal or spiritual growth has to take these things into account when investing.

I also believe that if everyone does invest according to their personal values, then, since so many of core values are alike -- and are supportive of higher ideals -- that in the long run, only companies employing these higher values will truly prosper.

For anyone interested I have a site that uniquely covers the latest global news and research on ethical investing. It's at

Best wishes, Ron Robins