THE MENNONITE Vol. 7, No 11, June 04
By Michael Shank

When a financial services firm such as Mennonite Mutual Aid (MMA), a company committed to socially responsible investing, makes investment decisions, they rely on a philosophy of stewardship for guidance. The firm’s philosophy is guided by a set of core social values that evaluate corporate behavior to determine which companies are appropriate for MMA portfolios.

However, MMA’s philosophy is not consistent with its practice. Investors peering beyond the façade end up absconding, as I did, in order to invest in more socially responsible firms, like PAX or New Alternatives Fund, that are consistent with their stated social values.

According to the company’s Web site, “MMA seeks to invest in companies that (1) respect the dignity and value of all people, (2) build a world at peace and free from violence, (3) demonstrate a concern for justice in a global society, (4) exhibit responsible management practices, (5) support and involve communities and (6) practice environmental stewardship.” Although these guidelines articulate MMA’s expectations for corporate behavior, it appears that their holdings are not behaving.

Divergence occurs between MMA’s theory and practice for two reasons: (1) Studious research of corporate track records seems to be absent, and (2) new employees claim no responsibility for old share purchases. As I flipped through my first MMA Annual Report in 1999 I was appalled at the hefty share of stock in Weyerhaeuser. That year I was working for an environmental firm in Seattle and was aware of Weyerhaeuser’s abominable track record as the Northwest’s largest timber company, responsible for excessive and irreparable clear-cutting of old-growth forests. Weyerhaeuser was not the only shocker; corporations with even shadier track records accompanied MMA’s list. I got on the phone with an MMA buyer, who defended Weyerhaeuser’s treatment of employees and was reticent to believe in Weyerhaeuser’s clear-cutting history.

I divested everything. My dollars were intended for MMA’s core values, but since their report showcased investments incongruous with MMA’s stewardship philosophy, I had to divest. Did other MMA investors care where their dollars were channeled? Were they divesting? Why were MMA staffers so uninformed about their companies’ track records?

This spring I returned to MMA’s Web site to download their 2003 Annual Report, hoping to witness progress in screening processes. Again the report touted investments in McDonalds (destructive deforester, violator of labor standards), Clear Channel Communications (sponsor of pro-Iraq-war rallies), Kraft (owned by tobacco giant Altria, formerly Philip Morris), Coca-Cola (fires workers’ rights advocates, abandons factories after depleting local water supplies) and Weyerhaeuser. MMA included Citigroup, Kroger and Time Warner—all companies subjected to national boycotts in recent years. Have MMA’s values been put in the back seat while financial considerations take the wheel? (MMA is not the only socially responsible investment firm with a lengthy list of such companies. Domini and Green Century, firms with comparable standards, stay afloat with a “top 10 holdings” list that is incongruous with the values they espouse.)

MMA may invest in these corporations to establish opportunities for shareholder advocacy. Shareholder advocacy can be a catalyst for social change only if brokers and investors are well-informed and attend company meetings regularly. MMA, however, provides little evidence of advocacy work and, in the case of Weyerhaeuser, needed me to substantiate the timber company’s destructive track record.

Shareholder advocacy or investment-abstention from corporations worthy of boycotting are the two choices afforded investors. Since MMA chose the former, my hope is that MMA and their investors are mindful of (1) Clear Channel encouraging its 1,000-plus radio stations to host pro-Iraq-war rallies, (2) Coca-Cola’s trend in firing advocates of fair-labor practices, eagerness to abandon factories after depleting local water supplies, (3) Kraft’s earnings profited by parent company, tobacco giant Altria, (4) McDonald’s busting of unionizing attempts to monitor deterioration of workers’ rights and (5) Weyerhaeuser’s legacy as the Northwest’s top logger of old-growth forests.

Does MMA attend the company meetings of Clear Channel, Coca-Cola, Kraft, McDonalds and Weyerhaeuser? Who’s campaigning for change in these companies?

If MMA seeks to invest in companies that respect the dignity of all people, build a world free from violence, and practice environmental stewardship, then MMA should implement these values into their purchasing practices. Contact MMA at 1-800-348-7468 and insist on investing that is socially responsible.

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Michael Shank is a master’s degree student in the Conflict Transformation Program at Eastern Mennonite University, Harrisonburg, Va.