IF YOU FIND YOURSELF TALKING ABOUT ISSUES THAT CONCERN YOU, OR YOU’RE MOTIVATED TO MAKE A DIFFERENCE TO THE WORLD YOU LIVE IN, RESPONSIBLE INVESTMENT OFFERS A TANGIBLE WAY TO TRANSLATE WORDS INTO ACTION.
You may already be actively involved in social or environmental causes. Perhaps you work as a volunteer, belong to a special interest group or make donations to a particular cause. RI gives you a way to take this activism one step further.
HOW YOU SPEND
You’re probably already aware that you can be an “activist” by the choices you make as a consumer. You make choices on a daily basis about the energy you use, the car you drive or what groceries you buy. These choices are examples of ways you can use your money to support or withhold support for different companies.
HOW YOU SAVE AND INVEST
Responsible investment gives you the opportunity to make similar choices with your super, savings and investments. You can choose to put your super in a responsible investment option. You can open a savings account with a socially responsible bank or take out a green loan for your car or home. When it comes time to plan your investments you can consult a specialist financial adviser and invest through specialist RI managed funds.
SHAREHOLDER ACTIVISM
Direct investment through the share market gives you even more potential to influence the behaviour of companies. This is called shareholder activism. Large institutional investors, including specialist RI fund managers already have excellent track records for actively engaging companies they invest in to alter corporate behaviour.
RI fund managers from Australasia and across the world have collaborated on common issues. They have successfully engaged with the companies in which they invest to seek improvements on environmental, social or governance issues.
For example, several large super funds from around the world have targeted US car manufacturers. Their aim has been to raise awareness that those manufacturers have been purchasing steel from Brazilian mining companies known to be using bonded labour in the hope they can expose and change such practices.
On a much smaller scale as an individual shareholder you can use your voting rights and ask questions at annual general meetings in an effort to improve corporate responsibility.
As a shareholder you have an ownership stake in the company. By being an active owner of shares you can exercise your right to vote and right to raise resolutions to improve the management of companies you hold shares in. Even resolutions that gain minority support can attract the attention of directors and change corporate behaviour. For example, an environmental resolution raised by a group of nuns that gained 24% support inspired GE to undertake a full energy audit of the company, which then led to the launch of GE’s suite of environmental products and services called ecomagination.
RI IN ACTION!
Find out how Kate uses negative screening to avoid investing in companies involved in the manufacture of armaments.
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