Cool Investing

Cool Investing: Making Your Money Work for Change

Mining, fishing, shipping and manufacturing are all big business for foreign companies operating in the Pacific. While many will argue that opening up to the global market has benefited Pacific islanders significantly, creating a strong, well-educated, and vibrant middle class, others would counter that such economic activity has seriously undermined rural communities, placing their once sustainable local livelihoods in a position of poverty.

What do these changes have to do with you, and what, if anything, can you do about them?

Through the money you deposit in your bank accounts, trust funds, GICs or retirement funds, money is being invested in your name. You have the right (and some would argue, obligation) to ensure that that money you’ve entrusted to financial managers and institutions is being invested in ways you feel comfortable about.

You have the power to affect the behaviour of multinational organizations! Companies do answer to their shareholders and a great way for you to assert your concern about the Pacific is by becoming an informed and responsible investor.

Ethical funds

Ethical funds are mutual funds that are designed to support a code of corporate ethics. Some of these are “Green” funds that pledge not to invest in companies that carry out practices harmful to the environment. Other types of funds are social justice funds that support companies that are union-friendly, or funds that invest only in companies based in the fund's home country. Many financial institutions offer a selection of ethical funds from which to choose. It’s important to read the guidelines that a particular fund employs, to see how closely your own ethics and principles coincide. For instance, some funds might consider ethical those companies that have adopted environmental standards regulating their operations in their home country – yet these same companies might have deliberately lobbied for exemption of those same standards for their overseas operations. Talk to a representative of the company in which you’re considering investing, and let them know that you’re concerned with development issues in the Pacific. As an investor you may also be entitled to attend an annual general meeting – these are wonderful occasions on which to make your concerns known.

Research before you invest

The best way to find out about a specific company, whether it be one in which you’re thinking of investing, or one in which your mutual fund or RSP invests, is to write and request a copy of the company’s most recent annual report. Companies are required in their annual reports to provide a list of other operations they own (or who the company is owned by), what their holdings are, where they operate, what they pay their top employees, etc. If you have trouble interpreting the documents (they can be pretty dense!), take them to a financial advisor and get some help in using the report to answer your questions.

Keep tabs on what your funds are doing

If you think that your fund is investing in something it shouldn’t be, talk it over with a representative of your investment company, such as a financial advisor. If they can’t give you any satisfactory answers, contact the Securities Commission of your country. Securities Commissions are in place to keep investment companies on the straight and narrow. Contact them to find out what to do if you think your fund has broken its contract with you not to support certain kinds of industry. You have the legal right to expect that your fund will do what it says it will, and not do what it says it won’t.
If you find that your fund is doing something it shouldn't, let other investors know! Get the information out to other people who invest in your fund by writing letters, bringing it up at an annual general meeting, or even writing a letter to a newspaper or other media agency and asking them to publish what you've found. Other investors might not have the tools to learn what you have learned, and they might want to know, too. It might even turn into fuel for a letter writing campaign!

Be heard!

Remember, if you decide to invest (or not to invest) in a company on ethical grounds, let them know! Make it clear that you are making a point by monitoring what you do with your money. Check out a company's website or other information source and get the name of the appropriate person; a manager of investor relations, a member of the board of directors, maybe even the CEO. If you can't decide whom to address your letter to, ask a financial advisor to help you decide. Then, write and tell them who you are, what you're doing with your money as it relates to their company, and why.

There are also several organizations that work on monitoring businesses. Here is a list of a few of those organizations to get you started.

* Canadian Business for Social Responsibility at www.cbsr.bc.ca
* Corporate Social Responsbility Europe at www.csreurope.org
* Business for Social Responsibility at www.bsr.org
* Corporate Watch at www.corporatewatch.org
* Great Britain's Department of Trade and Industry's Corporate Social Responsibility site at www.societyandbusiness.gov.uk

Remember that as an investor, you have the right to demand that the corporations receiving your money be responsible to you. You have the right (and, some would argue, the responsibility) to know what your money is supporting and act to change that if you don't agree with it. Banks and investment brokerages and huge transnational corporations might seem more powerful than you, but remember that your money is what makes their world go around. If you want to be heard, speak with your money and they will listen!