In the swirl of events surrounding the collapse of global capital markets we are certainly in the middle of an epic time. It is one of those chaotic crisis/opportunity moments and in my view, a time that presents interesting insights into the interplay among morality, markets and the role of "faith" in investing. After all, when folks "invest" it is with a sort of belief in something intangible that will lead to a better future. The irony is that most investments have a disclaimer that says something like, "past results are no guarantee of future performance..." Faith is a little like that, without the disclaimer of course!
I come to these questions from a three-part perspective. I am trained as an engineer, scientist and finance person. I began my professional life as a chemical engineer in beer can manufacturing plants (I am not making this up!) Next I went to Wall Street for nearly twenty years, starting as a plain old stock broker, ending up as a portfolio manager specializing in "Value" investing with a mission related spin. As a large-cap value manager I was automatically given the "nun money," the accounts that had a moral spin because I was interested in how values integrated with investment and the "socially responsible investment movement." I was frequently introduced as "the only socialist on Wall Street." Now I run an organization that is often cited as the catalyst for the divestment movement that helped South Africans destroy apartheid.
The perspective of faith-based, institutional investors is pretty unique and arguably prophetic. The members of our organization, the Interfaith Center on Corporate Responsibility (www.ICCR.org), issued their first formal resolutions against predatory lending in 1993. As investors and activist investors, we warned the companies we held in our investment portfolios over and over again about the risks inherent in insufficient underwriting standards and the folly of securitization of sub-prime debt. As these companies are all public and their proxy statements are filed with the SEC, this is all part of the public record.
So here we are having issued these warnings ever before the CFTC; 300 primarily Protestant, Catholic and Jewish faith organizations who were "right" about the risks of unsustainable market practices. We take little joy in "being right." The "I told you so moment" doesn't last. What we are asking ourselves now is what could we have done differently to get our voice heard more effectively? Not with a sense of "guilt," but rather a sense of urgency.
We would like the insights we've had, the learnings we've accumulated, and the real connection between faith and investment to be incorporated in some way into the policy making environment moving forward. We would also like the "people in the pews" whose personal investments and pension funds (and jobs, mortgages and security) to understand that the organizations that manage the endowments that support the mission of their various faith traditions really were speaking up as this storm was gathering.
There is a lot that could be done. The notion that "socially responsible investing" is a nice little boutique for progressives is shortsighted. The approach we are talking about is more ethically and analytically rigorous. There is a lot that can be "seen" by integrating social values into corporate and investor actions through the lens of faith. The best investors have the best foresight. They see what others don't. Prophecy, if you will.
By the way, I really love the show. Thank you all for the wonderful...thought provoking...inspirational stories you bring. I am the mother of a 20-year-old with Aspberger's Syndrome and your recent Autism show was a miracle. Truly. Thank you, Laura Berry.
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