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Compelling Returns:Socially Responsible Investing

December 09, 2008

Scott Budde is Managing Director of Global Social and Community Investing at TIAA-CREF

As head of TIAA-CREF’s Global Social and Community Investing Department I often interact with TIAA-CREF clients interested in Socially Responsible Investing strategies.  I wrote the book mainly to help people realize that there are multiple SRI strategies. I wanted to give clear outlines of how those strategies work-even for individuals- and show that it is possible to achieve competitive returns from various SRI strategies while also generating some positive social impact.  In addition, it is helpful for investors to realize that their motivations for considering SRI strategies will likely affect strategies they use for their own investment portfolios.  The main themes of the book are based on our three distinct yet complementary SRI strategies: socially screened investment options that enable investors to align their portfolios with their values; shareholder advocacy through the global promotion of sound corporate governance practices; and community investing to help meet specific local needs. We believe this integrated approach to SRI can produce positive investment results over the long term, helping us pursue a “double bottom line” of both competitive returns and social benefits.

Comments

The original puropose of Grameen was to help people help themselves. They did this by tiny loans and sound advice to individuals seeking to start a business. Even the tiniest start-ups, like a push cart, hot dog stand, barber or cleaning business was nurtured, allowing the proprietor to become ennobled by their independence and successful accomplishment.

Those at the bottom can lift themselves by their own bootstraps only if there is a free and open economic system in place. Most of the world's people are held back by oppressive regulatory burderns and a lack of good legal title to their property and the availability of credit. The best way to help those people is not by hand-outs, but by removing the obstacles standing in their way.

Hernando deSoto's books on this subject provide detailed evidence of the factors that prevent the world's poor from bettering themselves. The huge sums spent on foreign aid during the past 50 years has been largely wasted because it ignored the essentiality of an open upwardly mobile free economy. The Womens World Bank is another private agency that has pursued Grameen-like programs of micro-finance to enhance the lives of millions of individual entrepreneurs.

One of the lessons of history is that the mechanics of title to private property and a fair legal system was essential for capitalism to operate effectively fior the masses of citizens. Most poor nations are poor simply because their people's efforts are shackled by the restrictions and obstacles that prevent innovative and productive investment.

The most socially responsible action for individual Americans would be to call for the elimination of foreigh aid to countries that are not actively improving the opportunity of their people to buy, own, and operate their property and businesses. After all, progress comes from the efforts of the ordinary people at the bottom, never from the planned programs of the elites seeking to rule from on top.

It is certainly a great effort by GF to eliminate poverty. I do believe also poverty is a curse to human development. GF seems always pointing social responsibilities of just the rich peoples. What are the social responsibilities of the poors? OK, just forget their social responsibility...what are their responsibilities to ownselves?? Unless..untill the poors helps themselves to reduce their unlimited population growth, habit of begging, looking for others to feed them, life without any effort to change their lives.....they will never come out of poverty...and unless God by Himself give them bounty from Haven, no one ..even GF can't solve the issue. It will remain a theory for ever.

Amjad, you are absolutely right! Ultimately, poverty is in the mind, and it is only when the mind becomes rich, and sheds the thoughts/habits of poverty, that an individual will move on to prosperity. This being said, Grameen Foundation is actually more about changing the way people think. Once they realize they can make a living on their own, then they being to dissolved poverty. This is why traditional charity does not work; in fact it creates more poverty because it has not changed the mind. A mind that does not perceive poverty will not create it. A mind that is rich and resourceful will always find the way to be prosperous.

Great insight Amjad. The following are souces which explain this point very well: "The Science of Getting Rich" by Wallace D. Wattles, and The Teachings of Abraham at www.abraham-hicks.com.

Dear Amjad Hag,

It is true the GF inspires the rich to take action against poverty.

I sincerely await answers to your questions:-

What are the Social Responsibilities for the poor?

What are the social responsibilities for ourselves?

I feel that our 2009 resolution should include:-

Training programs for the poor so that they can define their ambient causes of poverty, and find possible resolutions.

Some poverty is man made. I know many people who live as destitute having lost their employment to drug abuse.

Urban migration,over population, idleness,poor agricultural practices,irresponsible livelihood and unfair government policies can contribute to poverty.

The 2009 Resolution should include both our Social responsibilities, and the Poor Social Responsibility that address poverty.

Our responsibilities can include involving poor communities in training programs that cause them to understand the causes of their poverty status, and how to deal with factors that contribute to poverty.

We are living in a world of drastic change, and economic crisis. Our this years resolution can include innovative poverty eradication strategies.It is time to change our poverty eradication approaches.

I think e-learning and online training programs that are economical by nature can contribute to poverty resolutions. This can promote collaboration within diversity, and beyond borders,inspire broad poverty resolution . strategies for the 21st century challenges.

Grace.

Kenya