Sr. Pat Daly was interviewed for the web program, "In Good Faith", hosted by A Nun's Life Ministry.  The program seeks to explore God’s call in everyday life, with  monthly programs featuring guests from a variety of ministries, disciplines, and perspectives. Sr. Pat shared her knowledge of socially responsible investing and what it means to bring faith and finances together.

“In Good Faith” is their live web interview that takes place on occasional Wednesdays. You can listen to the interview with Pat Daly OP at http://anunslife.org/2012/01/11/igf012-in-good-faith/

December 12, 2011

Rebecca Jarvis talks with the Rev. Seamus Finn and Sister Pat Daly, from the Interfaith Center on Corporate Responsibility, about how they help major corporations realize their social duties to make them better.

To protect consumers and the environment, women religious lead the growing movement that’s taking on powerful corporations—one share at a time.

On May 6 this year, Sister Nora Nash stood before Goldman Sachs’ powerful CEO and his board for the investment bank’s annual meeting. Nash, a Sister of St. Francis of Philadelphia who wears wire-rim glasses and a tentative smile, was calling upon the investment bank to review its senior executive compensation policies and to report its findings to shareholders.

Goldman Sachs had just rewarded its top executives with $70 million in bonuses, even as workers were laid off, in the wake of spending half a billion dollars in legal fees and another $550 million in fines to the Securities and Exchange Commission for misleading clients.

A coalition of allies across the country had signed onto the resolution, including the Mount Angel Benedictine Sisters and several other orders. In fact, women religious have often been the face of shareholder advocacy.

“We’re just asking them to look at their policies and consider what part is greed,” says Benedictine Sister Marietta Schindler, who worries about the chasm between sky-high executive compensation on Wall Street and unemployment and empty stores on Main Street—and what that portends for America’s future.

Although this particular resolution garnered only 4.1 percent of shareholders’ votes, there is a strong case to be made that engaged shareholders are making a difference. They may even be at a tipping point for sparking corporate reform, should more people speak out.

Their goal is to create a movement powerful enough to change a bedrock value of corporate America, the value that holds that corporations (which legally have the right to be treated as “persons”) have only one responsibility: to maximize their own short-term profits for shareholders, no matter what the cost to society or the environment.

Joel Bakan, author of The Corporation (Free Press), famously points out that when an actual citizen acts that way, they are on their way to meeting a clinical diagnosis of psychopathy.

Secret weapon

Can corporations become better citizens? Former New York Governor Elliot Spitzer argues there are only three ways to change a public corporation’s behavior: through regulation, litigation, or through the collective power of shareholders.

“I started at this desk in 2000,” says David Berdish, manager of sustainable business development at Ford Motor Company who previously worked 17 years in the company’s manufacturing offices. “I was blown away by the impact of shareholder resolutions on management. I had no idea how powerful it was.”

“Unfortunately, this is one of the best-kept secrets of the Catholic Church,” says Sister Pat Daly, a Sister of St. Dominic of Caldwell, New Jersey and executive director of the Tri-State Coalition for Responsible Investment, an organization of 40 Roman Catholic dioceses and congregations in the New York metropolitan area. “You’re not going to hear about this work from the pulpit, and that’s a shame. Faced with devastating realities here in the United States and around the world, we ask how to be faithful to preaching the gospel in these times—well, this is where the rubber meets the road.”

There were six shareholder resolutions filed with Goldman Sachs in 2011, and more than 1,000 total in the United States. Tallies show about 38 percent concerned social policy goals, including environmental and human rights issues and concerns over political contributions; 30 percent were related to executive compensation; and 32 percent covered other corporate governance concerns.

The progressive Social Investment Forum reports that shareholder support for social and environmental issues is rising. For instance, a resolution at Chevron calling for an impact report on “fracking”—the controversial process of injecting millions of gallons of water and chemicals into underground fractures in order to release oil and gas—got 40.5 percent of shareholders’ votes. A resolution calling for beverage container recycling earned 29.3 percent of the vote at McDonalds, and a demand for sustainability reporting at Layne Christensen, a water infrastructure services company, garnered 92.8 percent.

Results oriented

Ceres, one of many groups that coordinates and facilitates shareholder resolutions, reported that 45 shareholder resolutions were withdrawn this year alone regarding natural gas fracking, water scarcity, oil refinery risk management, and coal ash disposal. That means that the companies agreed to follow shareholders’ suggestions before the annual meeting took place, where shareholders would vote on the resolutions.

The conservative Manhattan Institute advises that the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act gives shareholder activists “more ammunition with which to fight” boards and management, largely because Dodd-Frank mandates that shareholders get a “say on pay” regarding executive compensation.

Father Séamus Finn, director of social justice for the Missionary Oblates of Mary Immaculate, agrees that Dodd-Frank is a game-changer. Finn is also on the board of the Interfaith Center for Corporate Responsibility, an umbrella group that supports coalitions like the one Nash spoke for at the Goldman Sachs meeting.

The ICCR was born when a handful of faith-based organizations that owned shares of companies doing business in South Africa successfully petitioned management of those companies to divest until apartheid ended. It seemed quixotic but gathered force and is now credited with being a key moral and financial influence on ending apartheid.

Today the ICCR has about 300 member organizations, including Catholic Relief Services, Christian Brothers Investment Services, St. Joseph Health System, the American Baptist Churches, and the Presbyterian Church. Together they hold nearly $100 billion in collective assets. Secular socially responsible investing reaches even further. The Connecticut state pension fund vigorously uses socially responsible investment policies, for example.

Socially responsible investing stands on three legs: screening, or only buying stocks in well-managed companies that reflect your values; community investing, or loaning money to underserved areas; and shareholder advocacy (also known as shareholder activism).

“I use the term ‘engaged shareholder,’ ” says Daly. “I’m a very reasonable person in the midst of these companies. The ICCR and Tri-State CRI communities are voices of reason.”

At times Daly’s Tri-State Coalition may buy a minimum number of shares in a company that does not meet their screening standards (ExxonMobil, for example), so that they can speak out to its management through a shareholder resolution. More typically, though, the coalition owns shares in companies its directors believe in, like Ford, and they engage in surprisingly cordial dialogue with company management.

Daly became one of the best-known faces of shareholder activism partly because of her longtime advocacy at Ford—a relationship that has been widely reported and was even the subject of a doctoral dissertation at the University of Michigan.

In “Climate, Cars, and Catholic Nuns,” Melissa Forbes examined how Daly encouraged the company to step into its current role as an industry leader in social and environmental responsibility. Several managers at Ford referenced their Catholic backgrounds with Forbes, one joking, “I was brought up in a good Catholic school, so I’m not going to give Sister Pat a hard time.”

Ford’s Berdish likes to tell the story of how Daly urged Ford in 2008 to set a greenhouse gas emissions reduction target. No other U.S. automobile manufacturer had done so, but Daly reminded executives that there was a precedent: Ford had been first to withdraw from the Global Climate Coalition, an infamous lobbying association opposing action on greenhouse gas emissions. Ford left in 1999. General Motors and Chrysler followed in 2000.

Ford agreed to set the emissions target, meaning the shareholder resolution became moot. Most resolutions evaporate at that point, but Berdish and others at Ford wanted to support education on climate change. Ford and the engaged shareholders issued a joint statement about Ford’s new policy at the 2008 meeting.

“I believe it’s your obligation as a Catholic to make your work fit with your faith,” says Berdish. He says he’s seen far fewer shareholder resolutions in recent years and frets that the movement may be losing momentum. “Either that, or perhaps it’s just at Ford,” he says.

Berdish’s concern brings Daly one of her trademark, good-humored laughs. “That’s exactly why they’ve seen a drop-off,” she says. “The word is out that if you have a concern, Ford will meet with you.”

This kind of dialogue between engaged shareholders and management is also part of shareholder advocacy, bringing change without confrontation, change that earns companies good public relations. That’s something that engaged shareholders are just fine with, in part because it helps their own triple bottom line: financial profit, doing good for people, and doing good for the environment.

De La Salle Christian Brother Peter Tripp, who serves on the board of Christian Brothers Investment Services, says, “There is growing recognition that the voices of shareholders can eventually, if not immediately, make a difference.”

“You have to be optimistic in this work,” says Nash, who ticks off successes, including how Best Buy and Walmart agreed not to sell explicit video games to minors. She remembers sitting next to an executive from a major corporation who told her that what she and other engaged shareholders were doing was “mind-boggling,” and that they had succeeded in calling him to reexamine what he was doing. “We work at this, and the day does come that you’re not going backwards,” she says.

Boardroom missionaries

With the twin calamities of the wounded economy and the looming threat of climate change, Finn urges the church and Catholics in the pews to speak out and convert others.

“The church has done a great job in traditional missionary work, work that was full of heroic sacrifice and virtue,” he says. “One of the new opportunities to shed the light of the gospel in today’s world is through the business community and through investments, making sure those investments are consistent with our Catholic identity. This, too, is true missionary work.”

Most Americans are not directly invested in the stock market. However, everyone lives in a state with a pension fund for its public employees, most people save money in banks that invest that money, and many own at least a small 401(k) or are an alumnus of a college with a fund.

“The institutional investor has control of more votes and can wield more power in pressing an issue,” says Tripp. “But the beliefs on issues start with individuals.”

Finn, who was at Nash’s side at the Goldman Sachs meeting, thinks the loss and fear resulting from the 2008 financial crisis was a vivid lesson in what we can expect to reap from unbridled greed and inadequate regulation in the markets.

The Federal Reserve reported in March 2009 that U.S. households’ net worth fell by $11 trillion—nearly 18 percent—in 2008. That wealth simply disappeared. “Disappeared,” Finn emphasizes. “Are we ready to learn from that lesson?”

Bang for the buck?

Not everyone agrees that engaged shareholders make much of a difference. Robert Kennedy, Catholic studies professor at the University of St. Thomas in St. Paul, Minnesota, who consults with dioceses about their investments, doesn’t even think the broader category of socially responsible investing has much oomph. “It’s still a marginal player,” he says.

Perhaps, but according to the Social Investment Forum, assets managed with some type of socially responsible guidelines have increased more than 34 percent since 2005, while the broader pool of professionally managed assets has increased only 3 percent. Today nearly $1 out of $8—just over 12 percent of $25.2 trillion in professionally managed assets—is part of some type of socially responsible investing.

Kennedy also sees a problem in that people define social responsibility differently. “I know at least one investment manager who deliberately sought to include defense contractors because he felt it was patriotic and socially responsible,” he says.

Another criticism of engaged shareholders is that those sisters are never seen calling corporations to task for abortion. There’s a good reason for that, says Daly. First, there are only a handful of companies that manufacture abortifacients or provide abortions; second, Catholic religious orders screen these companies from their investments. You cannot be a shareholder advocate in a company in which you own no shares.

Kevin Schmiesing, a research fellow with the libertarian Acton Institute, argues that individual Catholics in the pew cannot be expected to analyze the companies in which their mutual fund invests. The U.S. bishops provide guidelines for their own use (see sidebar, page 20), but, he notes, not for the individual investor. In any case, he believes that investors are at a moral remove from any evil done at corporations. “I’m not saying to have a laissez-faire attitude,” he clarifies. “You are at some sense cooperating with the companies, but you can’t be held morally responsible. In a fallen world, we all cooperate.”

Yet, in fact, it’s a simple thing to invest in a socially responsible manner, especially since most studies show screened mutual funds do as well or better than funds that are only concerned with the next quarter’s profits.

It’s also a simple thing to remember Pope John Paul II’s words: “Even the decision to invest in one place rather than another . . . is always a moral and cultural choice.”

By KEVIN ROOSE, New York Times

Published: November 12, 2011

ASTON, Pa.

NOT long ago, an unusual visitor arrived at the sleek headquarters of Goldman Sachs in Lower Manhattan.

It wasn’t some C.E.O., or a pol from Athens or Washington, or even a sign-waving occupier from Zuccotti Park.

It was Sister Nora Nash of the Sisters of St. Francis of Philadelphia. And the slight, soft-spoken nun had a few not-so-humble suggestions for the world’s most powerful investment bank.

Way up on the 41st floor, in a conference room overlooking the World Trade Center site, Sister Nora and her team from the Interfaith Center on Corporate Responsibility laid out their advice for three Goldman executives. The Wall Street bank, they said, should protect consumers, rein in executive pay, increase its transparency and remember the poor.

In short, Goldman should do God’s work— something that its chairman and chief executive, Lloyd C. Blankfein, once remarked that he did. (The joke bombed.)

Long before Occupy Wall Street, the Sisters of St. Francis were quietly staging an occupation of their own. In recent years, this Roman Catholic order of 540 or so nuns has become one of the most surprising groups of corporate activists around.

The nuns have gone toe-to-toe with Kroger, the grocery store chain, over farm worker rights; with McDonald’s, over childhood obesity; and with Wells Fargo, over lending practices. They have tried, with mixed success, to exert some moral suasion over Fortune 500 executives, a group not always known for its piety.

”We want social returns, as well as financial ones,” Sister Nora said, strolling through the garden behind Our Lady of Angels, the convent here where she has worked for more than half a century. She paused in front of a statue of Our Lady of Lourdes. “When you look at the major financial institutions, you have to realize there is greed involved.”

The Sisters of St. Francis are an unusual example of the shareholder activism that has ripped through corporate America since the 1980s. Public pension funds led the way, flexing their financial muscles on issues from investment returns to workplace violence. Then, mutual fund managers charged in, followed by rabble-rousing hedge fund managers who tried to shame companies into replacing their C.E.O.’s, shaking up their boards — anything to bolster the value of their investments.

The nuns have something else in mind: using the investments in their retirement fund to become Wall Street’s moral minority.

A  PROFESSORIAL woman with a sculpted puff of gray hair, Sister Nora grew up in Limerick County, Ireland. She dreamed of becoming a missionary in Africa, but in 1959, she arrived in Pennsylvania to join the Sisters of St. Francis, an order founded in 1855 by Mother Francis Bachmann, a Bavarian immigrant with a passion for social justice. Sister Nora took her Franciscan vows of chastity, poverty and obedience two years later, in 1961, and has stayed put ever since.

In 1980, Sister Nora and her community formed a corporate responsibility committee to combat what they saw as troubling developments at the businesses in which they invested their retirement fund. A year later, in coordination with groups like the Philadelphia Area Coalition for Responsible Investment, they mounted their offensive. They boycotted Big Oil, took aim at Nestlé over labor policies, and urged Big Tobacco to change its ways.

Eventually, they developed a strategy combining moral philosophy and public shaming. Once they took aim at a company, they bought the minimum number of shares that would allow them to submit resolutions at that company’s annual shareholder meeting. (Securities laws require shareholders to own at least $2,000 of stock before submitting resolutions.) That gave them a nuclear option, in the event the company’s executives refused to meet with them.

Unsurprisingly, most companies decided they would rather let the nuns in the door than confront religious dissenters in public.

“You’re not going to get any sympathy for cutting off a nun at your annual meeting,” says Robert McCormick, chief policy officer of Glass, Lewis & Company, a firm that specializes in shareholder proxy votes. With their moral authority, he said, the Sisters of St. Francis “can really bring attention to issues.”

Sister Nora and her cohort have gained access to some of the most illustrious boardrooms in America. Robert J. Stevens, the chief executive of Lockheed Martin, has lent her an ear, as has Carl-Henric Svanberg, the chairman of BP. Jack Welch, the former chief executive of General Electric, was so impressed by their campaign against G.E.’s involvement in nuclear weapons development that he took a helicopter to their convent to meet with the nuns. He landed the helicopter in a field across the street.

The Sisters of St. Francis are hardly the only religious voices challenging big business. They have teamed up on shareholder resolutions with other orders, including the Sisters of Charity of St. Elizabeth and the Sisters of St. Dominic of Caldwell, both in New Jersey. The Interfaith Center on Corporate Responsibility, the umbrella group under which much of Sister Nora’s activism takes place, includes Jews, Quakers, Presbyterians and nearly 300 faith-based investing groups. The Vatican, too, has weighed in with a recent encyclical, condemning “the idolatry of the market” and calling for the establishment of a central authority that could stave off future financial crises.

“Companies have learned over time that the issues we’re bringing are not frivolous,” said the Rev. Seamus P. Finn, 61, a Washington-based priest with the Missionary Oblates of Mary Immaculate and a board member of the Interfaith Center. “At the end of every transaction, there are people that are either positively or negatively impacted, and we try to explain that to them.”

On a recent Saturday morning, 12 members of the Sisters of St. Francis shareholder advocacy committee gathered in Our Lady of Angels, a cavernous, hushed building housing 80 nuns that if not for the eerie quiet would resemble an Ivy League dorm. As three nuns talked in the foyer, their tales of nieces and nephews echoing through the halls, the advocacy group, which includes several lay people, gathered in the Assisi Room for its quarterly meeting.

After a prayer, a group recitation from Psalm 68 (“The protector of orphans and the defender of widows is God in God’s holy dwelling”) and a round of applause for a nun celebrating her 50th anniversary, or golden jubilee, as a member of the order, they settled down to business.

Sister Nora, in a gray-checked jacket and a pink blouse overlaid with a necklace bearing the Franciscan cross known as a Tau, began by updating the group on its finances. In addition to its shareholder advocacy program, the committee has a social justice fund from which it allocates low-interest loans, in amounts up to $60,000, to organizations that fit with its mission. This quarter, it lent money to the Disability Opportunity Fund, a nonprofit that helps the disabled; and the Lakota Funds, a group trying to finance a credit union on a Native American reservation in South Dakota.

LATER, over lunch in the cafeteria downstairs, the Sisters of St. Francis discussed the delicate dance they face in their shareholder advocacy program — pushing corporations to change their actions, while not needling them so much on sensitive issues like executive pay that bigwigs like Mr. Blankfein, at Goldman Sachs, are not willing to meet with them.

“We’re not here to put corporations down,” Sister Nora said, between bites of broccoli salad. “We’re here to improve their sense of responsibility.”

“People who have done well have a right to their earnings,” added Sister Marijane Hresko, when the topic of executive compensation comes up. “What we’re talking about here is excess, and how much money is enough for any human being.”

Sister Nora nodded. “I can’t exclude people like Lloyd Blankfein from my prayers, because he’s just as much human as I am,” she said. “But we like to move them along the spectrum.”

Goldman tries to maintain a polite relationship. “We have found our conversations with Sister Nora Nash and other I.C.C.R. members to be very insightful and instructive,” a spokesman said.

But change has not been speedy. Despite some successes — such as a campaign directed at Wal-Mart that the nuns say led the company to stop selling adult video games — the insider-heavy nature of corporate share structures means that the Sisters of St. Francis rarely succeed in real-world terms, even when their ideas prove popular. Most of their submissions receive less than 20 percent of the shareholder vote, and many get stuck in single digits.

“I honestly don’t know if it’s been effective or not, but they do highlight issues other shareholders don’t,” Mr. McCormick of Glass, Lewis says.

Still, Sister Nora, who would give her age only as “late 60s,” said she would keep pushing companies to do the right thing. Lately, she has been particularly interested in hydraulic fracturing, or fracking, the natural gas collection technique that has been the subject of controversy over its environmental and chemical impact. She has been attending rallies for the antifracking cause, and has submitted resolutions to oil corporations including Chevron and Exxon, encouraging them to put firmer controls in place.

“My work will never be done,” she says. “God has his ways.”

Soon, Sister Nora will go on retreat, an annual Franciscan rite in which nuns retire to solitude for a week of contemplation and prayer. There, she will gather her strength, rebuild her fighting spirit and emerge ready for the next round of resolutions and closed-door meetings.

She has even identified her next target: Family Dollar, one of the many deep-discount chains that sell cheap imported goods to Americans who generally do not know, or necessarily care, where those products come from. Sister Nora wants to make sure Family Dollar’s suppliers have fair labor policies, and she is concerned about whether its products are free of toxins.

“They just got a new president,” Sister Nora says. “I have a letter ready to go Monday.”

2011-03-08

Small-scale farmers can double food production within 10 years in critical regions by using ecological methods, a new UN report* shows. Based on an extensive review of the recent scientific literature, the study calls for a fundamental shift towards agroecology as a way to boost food production and improve the situation of the poorest.

“To feed 9 billion people in 2050, we urgently need to adopt the most efficient farming techniques available,” says Olivier De Schutter, UN Special Rapporteur on the right to food and author of the report. “Today’s scientific evidence demonstrates that agroecological methods outperform the use of chemical fertilizers in boosting food production where the hungry live -- especially in unfavorable environments.”

Agroecology applies ecological science to the design of agricultural systems that can help put an end to food crises and address climate-change and poverty challenges. It enhances soils productivity and protects the crops against pests by relying on the natural environment such as beneficial trees, plants, animals and insects.

“To date, agroecological projects have shown an average crop yield increase of 80% in 57 developing countries, with an average increase of 116% for all African projects,” De Schutter says. “Recent projects conducted in 20 African countries demonstrated a doubling of crop yields over a period of 3-10 years.”

“Conventional farming relies on expensive inputs, fuels climate change and is not resilient to climatic shocks. It simply is not the best choice anymore today,” De Schutter stresses. “A large segment of the scientific community now acknowledges the positive impacts of agroecology on food production, poverty alleviation and climate change mitigation -- and this this is what is needed in a world of limited resources. Malawi, a country that launched a massive chemical fertilizer subsidy program a few years ago, is now implementing agroecology, benefiting more than 1.3 million of the poorest people, with maize yields increasing from 1 ton/ha to 2-3 tons/ha.”

The report also points out that projects in Indonesia, Vietnam and Bangladesh recorded up to

92 % reduction in insecticide use for rice, leading to important savings for poor farmers. “Knowledge came to replace pesticides and fertilizers. This was a winning bet, and comparable results abound in other African, Asian and Latin American countries,” the independent expert notes.

“The approach is also gaining ground in developed countries such as United States, Germany or France,” he said. “However, despite its impressive potential in realizing the right to food for all, agroecology is still insufficiently backed by ambitious public policies and consequently hardly goes beyond the experimental stage.”

The report identifies a dozen of measures that States should implement to scale up

agroecological practices.

“Agroecology is a knowledge-intensive approach. It requires public policies supporting agricultural research and participative extension services,” De Schutter says. “States and donors have a key role to play here. Private companies will not invest time and money in practices that cannot be rewarded by patents and which don’t open markets for chemical\ products or improved seeds.”

The Special Rapporteur on the right to food also urges States to support small-scale farmer’s organizations, which demonstrated a great ability to disseminate the best agroecological\ practices among their members. “Strengthening social organization proves to be as impactful as distributing fertilizers. Small-scale farmers and scientists can create innovative practices when they partner”, De Schutter explains.

“We won’t solve hunger and stop climate change with industrial farming on large plantations.\ The solution lies in supporting small-scale farmers’ knowledge and experimentation, and in raising incomes of smallholders so as to contribute to rural development.”

“If key stakeholders support the measures identified in the report, we can see a doubling of food production within 5 to 10 years in some regions where the hungry live,” De Schutter says. “Whether or not we will succeed this transition will depend on our ability to learn faster from recent innovations. We need to go fast if we want to avoid repeated food and climate disasters in the 21st century.”

(*) The report “Agro-ecology and the right to food” was presented today before the UN Human

Rights Council in Geneva. This document is available in English, French, Spanish, Chinese and

Russian at: www.srfood.org and http://www2.ohchr.org/english/issues/food/annual.htm

Olivier De Schutter was appointed the Special Rapporteur on the right to food in May 2008 by the United Nations Human Rights Council. He is independent from any government or organization.

For more information on the mandate and work of the Special Rapporteur, visit: www.srfood.org

or http://www2.ohchr.org/english/issues/food/index.htm

To view the report: http://www.srfood.org/images/stories/pdf/officialreports/20110308_a-hrc-16-49_agroecology_en.pdf

Press contacts:

Ulrik Halsteen (OHCHR): Tel: +41 22 917 93 23 / E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it