For some 250 years, responsible investing has been a key means of aligning our influence with our values. The Investor Relations function is squarely at the nexus between the strategies and performance of the company and the primary leverage point for stakeholder expression of sustainability goals. What does this mean for the Investor Relations professional?
Perhaps the very earliest occurrence of socially responsible investing took place in 1758 when the Yearly Meeting of the Religious Society of Friends, better known as the Quakers, issued the first of a series of denunciations of the slave trade, advising its members to “avoid being any way concerned, in reaping the unrighteous Profits arising from that iniquitous Practice of dealing in Negroes and other Slaves” and “endeavour to keep their Hands clear of this unrighteous Gain of Oppression.”
Around the same time (between 1744 and 1760), John Wesley, an English preacher and founder of the Methodist Church, delivered his sermon entitled The Use of Money. You may have heard the saying, “Make all you can, save all you can, give all you can.” That is John Wesley, paraphrased. What it doesn’t capture, however, are the boundaries he drew around the first of his three rules: “gain all you can.” Wesley advised his followers to gain but without hurt to body, mind, or soul, of either ourselves or our neighbours. He spoke of unhealthy work environments, cheating, lying, anti-competitive behaviour, the sale of anything that may impair health, and what he called “sinful trade”. He advocated honest industry, diligence, continuous improvement, and best practice. Religious institutions have been at the forefront of socially responsible investing, or SRI, ever since.
In the last five decades, we have seen a steady rise in interest in SRI. [For a brief history of SRI, see these entries on Wikipedia and About.com.] We know environmental, social, and governance (or ESG) issues are not new to investors. So what has changed? Read on!