Shareholders call on firms for genocide-free mutual funds
Investors Against Genocide targets industry's giants
By Lorne Bell - Thursday March 20 2008
Soon after the genocide in the Darfur region of Sudan began,
advocates around the world initiated campaigns to divest from companies
tied to the Sudanese regime. In the U.S., 24 states have passed
divestment laws thus far, leading to state pension fund sell-offs of
millions of dollars of equity. But Investors Against Genocide (IAG) is
taking the divestment strategy a step further, asking private citizens
to pressure their mutual fund investment firms to follow a similar path.
“Like so many Americans, I had a little bit of understanding at the fringes of my consciousness about the genocide in Darfur,” said Eric Cohen, chairperson of Investors Against Genocide. “But it didn’t really touch me in a way where I thought I could do anything about it until I discovered the problem of investments.”
Cohen had previously co-chaired the Massachusetts Coalition to Save Darfur, which was co-founded by the Jewish Community Relations Council of Boston. In 2006, the coalition began a grassroots campaign to pressure Fidelity – one of the largest investors in PetroChina and Sinopec oil companies, both of which are partnered with the Sudanese government – to stop investing in companies funding genocide. Despite more than 200,000 calls and letters from investors, Fidelity refused to adjust its holdings.
“[Fidelity’s] only response was that things in Darfur are awful, they feel bad, but it’s really someone else’s problem to deal with,” said Cohen. “We were so horrified that we launched a public campaign.”
IAG expanded the Coalition’s work to focus on what Cohen said was a much broader institutional problem. The organization has targeted more than 50 mutual funds – including those held by Fidelity, Vanguard, T. Rowe Price, Franklin Templeton and Barclays – and submitted a proposal that calls on the funds’ board members to establish genocide-free investment policies.
After much legal wrangling and protest from Fidelity, Investors Against Genocide won SEC approval to place their proposal on the proxy ballot mailed to shareholders.
In response to the Advocate’s request for comment, Fidelity sent a copy of the Statement of Opposition printed on the proxy ballot urging shareholders to vote against the proposal.
“If adopted, this proposal would limit investments by the Fund that would be lawful under the laws of the United States,” the statement read in part.
Voting for the first set of Fidelity funds took place on March 19, with subsequent votes taking place in April and May. Proposals submitted to other mutual fund firms will not be taken up for consideration until each holds its respective shareholder meetings.
But despite a 2007 study by Washington, D.C.-based KRC Research, which showed that 71 percent of respondents surveyed think companies should take human rights abuses into account when investing, Cohen said he did not expect the March 19 vote to garner the necessary support. Most proxy booklets, he said, are discarded without much thought. Still, he was confident that with increased awareness the public will take the time to vote their conscience.
“As the word gets out and more votes are cast with Fidelity and other [fund companies], people will pay attention and treat this as an important issue and, ultimately, we will be successful,” Cohen said. “Basic principles for ethical investing will be established at one fund after another, and as that begins to happen I think there will be serious market pressures to change.”
Nancy Kaufman, executive director of the JCRC, is committed to doing her part to make sure that happens.
“I do not want to see my money invested in companies that are complicit in genocide,” Kaufman said before the vote. “I will be sure to vote in favor of this resolution when I get my proxies in the mail.”
IAG’s efforts have also gained significant support from human rights groups, including the Unitarian Universalist Service Committee, Physicians for Human Rights, the Genocide Intervention Network, Jews Against Genocide and the American World Jewish Service.
“We think it’s critically important that people know if their investments are providing capital to companies that are funding the genocide in Sudan, and that investors have a say as to whether their funds continue to support these companies,” said Ruth Messinger, president of the American World Jewish Service. “As funds pull out their investments in companies that support the genocide, we believe that will have an impact.”
But for the nearly 400,000 Sudanese slaughtered by government-hired militias, any changes brought about will have come too late. Cohen and IAG’s supporters hope that public opinion can pressure corporations to halt the bloodshed and prevent similar tragedies by sending a message to those that profit from genocide.
Added Cohen: “If we are successful in getting these policies instituted in the financial industry, it would be a significant deterrent to companies to ever get involved with genocide issues and would create a bulwark against crimes against humanity.”
Investors Against Genocide targets industry's giants
By Lorne Bell - Thursday March 20 2008
“Like so many Americans, I had a little bit of understanding at the fringes of my consciousness about the genocide in Darfur,” said Eric Cohen, chairperson of Investors Against Genocide. “But it didn’t really touch me in a way where I thought I could do anything about it until I discovered the problem of investments.”
Cohen had previously co-chaired the Massachusetts Coalition to Save Darfur, which was co-founded by the Jewish Community Relations Council of Boston. In 2006, the coalition began a grassroots campaign to pressure Fidelity – one of the largest investors in PetroChina and Sinopec oil companies, both of which are partnered with the Sudanese government – to stop investing in companies funding genocide. Despite more than 200,000 calls and letters from investors, Fidelity refused to adjust its holdings.
“[Fidelity’s] only response was that things in Darfur are awful, they feel bad, but it’s really someone else’s problem to deal with,” said Cohen. “We were so horrified that we launched a public campaign.”
IAG expanded the Coalition’s work to focus on what Cohen said was a much broader institutional problem. The organization has targeted more than 50 mutual funds – including those held by Fidelity, Vanguard, T. Rowe Price, Franklin Templeton and Barclays – and submitted a proposal that calls on the funds’ board members to establish genocide-free investment policies.
After much legal wrangling and protest from Fidelity, Investors Against Genocide won SEC approval to place their proposal on the proxy ballot mailed to shareholders.
In response to the Advocate’s request for comment, Fidelity sent a copy of the Statement of Opposition printed on the proxy ballot urging shareholders to vote against the proposal.
“If adopted, this proposal would limit investments by the Fund that would be lawful under the laws of the United States,” the statement read in part.
Voting for the first set of Fidelity funds took place on March 19, with subsequent votes taking place in April and May. Proposals submitted to other mutual fund firms will not be taken up for consideration until each holds its respective shareholder meetings.
But despite a 2007 study by Washington, D.C.-based KRC Research, which showed that 71 percent of respondents surveyed think companies should take human rights abuses into account when investing, Cohen said he did not expect the March 19 vote to garner the necessary support. Most proxy booklets, he said, are discarded without much thought. Still, he was confident that with increased awareness the public will take the time to vote their conscience.
“As the word gets out and more votes are cast with Fidelity and other [fund companies], people will pay attention and treat this as an important issue and, ultimately, we will be successful,” Cohen said. “Basic principles for ethical investing will be established at one fund after another, and as that begins to happen I think there will be serious market pressures to change.”
Nancy Kaufman, executive director of the JCRC, is committed to doing her part to make sure that happens.
“I do not want to see my money invested in companies that are complicit in genocide,” Kaufman said before the vote. “I will be sure to vote in favor of this resolution when I get my proxies in the mail.”
IAG’s efforts have also gained significant support from human rights groups, including the Unitarian Universalist Service Committee, Physicians for Human Rights, the Genocide Intervention Network, Jews Against Genocide and the American World Jewish Service.
“We think it’s critically important that people know if their investments are providing capital to companies that are funding the genocide in Sudan, and that investors have a say as to whether their funds continue to support these companies,” said Ruth Messinger, president of the American World Jewish Service. “As funds pull out their investments in companies that support the genocide, we believe that will have an impact.”
But for the nearly 400,000 Sudanese slaughtered by government-hired militias, any changes brought about will have come too late. Cohen and IAG’s supporters hope that public opinion can pressure corporations to halt the bloodshed and prevent similar tragedies by sending a message to those that profit from genocide.
Added Cohen: “If we are successful in getting these policies instituted in the financial industry, it would be a significant deterrent to companies to ever get involved with genocide issues and would create a bulwark against crimes against humanity.”