Tue, May 03, 2005 page12

• Religious activists take on US boardrooms

  FAITH-BASED BUSINESS Decades of campaigning by religious groups have been adapted to the world of finance to apply pressure on managers to mend their ways

  • REUTERS
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  Armed with the power of faith and billions of dollars, the US' mighty religious establishment is trying to reform the country's boardrooms on issues from human rights to television violence.

  Faith-based groups, like other special interest groups, have strategic investments in hundreds of companies that let them use shareholder resolutions to push their agendas.

  Bosses, mindful of the importance of religion in the lives of many Americans and its growing impact on politics and public opinion, are paying increasing attention to activists and their causes.

  "We keep asking questions in the hope this will cause some soul-searching," said sister Susan Jordan, a Catholic nun with the School Sisters of Notre Dame St. Louis and coordinator of the Midwest Coalition for Responsible Investment.

  This soft-spoken 62-year-old servant of Christ has been battling big business for 20 years and her office, tucked away in a convent on the banks of the Mississippi, is a key command post in a wider campaign with US$110 billion under management.

  "As Christians we talk about gospel responsibility ... living more simply and not buying into consumerism, making the concerns of the poor your own, reverencing the environment and creation. All of those ... have implications when you think about issues and companies," she said.

  Decades of campaigning by religious groups, honed in the civil rights movement and opposition to the Vietnam War, have been adapted to the world of high finance, putting pressure on managers to pay attention and even mend their ways.

  "Take Coca Cola," said reverend David Schilling, program director at the New York-based Interfaith Center of Corporate Responsibility (ICCR). "Last year a resolution filed on HIV/AIDS was looked at by the board, who said `yes' and supported it."

  In a clear victory for the faith-based lobby, the soft-drinks giant has since produced a report on the economic impact of AIDS on its own operations.

  And Nike last week released a corporate responsibility report for last year that made it the first in the sportswear industry to name all 700 of its contract factory suppliers.

  "ICCR members have engaged the company for 10 years on issues related to labor conditions in Nike supplier factories globally and the need for the company to report on how it detects and addresses problems identified," Schilling said.

  ICCR was founded in 1971 and is a coalition of Christian and Jewish organizations, but as yet no Muslim groups, despite efforts to reach out to that community.

  The reason for this disparity is that Islamic teaching forbids the purchase of shares in a company engaged in an activity outlawed by Shariah-based Islamic principles, such as consumption of alcohol or gambling.

  "We cannot own anything that God prohibits," said Monem Salam, director of Islamic investing at Saturna Capital Corp in Bellingham, Washington.

  Even so, the momentum of faith-based shareholder activism is clearly growing. ICCR filed 264 shareholder resolutions this year, an almost fourfold increase from 20 years ago.

  The campaigns are also gaining traction because, in the post-Enron world, many bosses feel the same way.

  "Recent corporate scandals have caused many in the business world to think," said rabbi Mordechai Liebling of the Shefa Fund, a Philadelphia-based Jewish charity involved in community lending and shareholder activism.

  "Enron pricked people's conscience and was also a wake-up call. Where does greed lead?" he said.

  Companies, for their part, find religious lobby groups useful barometers of public opinion.

  General Motors, the subject of an early resolution when the Episcopalians lobbied it in 1971 to quit apartheid South Africa, said it had found the long years of contact productive.

  "Having an ongoing dialogue with these shareholder groups ... is a good way to hear each other's messages," GM spokeswoman Joanne Krell said.

  Monsanto, long a target of Sister Susan's coalition for its work on genetic modification of food sources, also extolled the benefits of talking to the groups.

  "We've met with Sister Susan Jordan and the other representatives of the Midwest Coalition for many years ... The feedback from many stakeholders around the world is factored into our thinking going forward," Diane Herndon, director of public policy and corporate responsibility, said by e-mail.

  Perched behind a stack of documents, Sister Susan said Monsanto was a good listener but had yet to come around to her side in an argument religious investors hold dear.

  "Food is a very sacred, cultural issue for many people and contamination of the food supply would be a serious, serious thing," she said.

  But shareholder activism has proved its worth, particularly at the moment in the US where a conservative, Republican-dominated Congress is not very open to laws aimed at changing corporate behavior, Liebling said.

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