U.S. corporations have generously aided Asian nations affected by last month's earthquake and tsunami. But there's more to good corporate...
PHILADELPHIA — U.S. corporations have generously aided Asian nations affected by last month’s earthquake and tsunami. But there’s more to good corporate citizenship than writing checks and donating equipment for disaster relief, advocates of socially responsible investing say.
Daniel Rosan, a program director at the Interfaith Center on Corporate Responsibility, a New York group that advises pension funds, called the corporate response “welcome and appreciated.”
Next, corporations should “turn to their day-to-day operations and … look at the harm they may be causing in smaller ways,” Rosan said.
U.S. companies have pledged at least $500 million for the Asian relief effort, according to the Committee to Encourage Corporate Philanthropy, a forum of chief executive officers.
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Corporate giving after the Sept. 11, 2001, attacks totaled $722 million, according to the Foundation Center, which works to advance knowledge about philanthropy.
But tsunami aid may be a poor guide for the investor who considers himself socially responsible. The five largest companies in the Calvert Social Index, designed by the Calvert Group mutual-fund family to track socially responsible stocks, have made impressive pledges, but so have the five largest companies spurned by Calvert.
Pledges by Johnson & Johnson of $83.4 million and by Pfizer of $35 million, composed of cash and medical supplies, lead the list among companies in the Calvert index. Cash-rich pharmaceutical companies have dominated corporate giving in recent years.
But General Electric, which is not in the index, has pledged $11.4 million in cash and equipment, including its match of $2.6 million in employee contributions.
Calvert omitted GE from the index because of its nuclear-power business.
By contrast, IBM, which is in the index, has pledged $1 million in goods and services, and is not matching employee contributions.
Some donors, such as Exxon Mobil, Wal-Mart, and Coca-Cola, have been criticized for their operations in the Indian Ocean region.
Exxon Mobil, which has pledged $5 million, is developing natural-gas fields in Indonesia’s hard-hit Aceh Province. In 2001, the International Labor Rights Fund helped 11 Aceh residents sue Exxon Mobil in federal court in the District of Columbia, alleging that military personnel providing security for the oil company committed human-rights abuses.
Derek Baxter, an attorney for the fund, welcomed Exxon Mobil’s tsunami aid.
“We think they have a particular debt to that area because they have been part of the problem for too long,” he said.
Exxon Mobil said in a statement that the lawsuit makes “no claim of human-rights violations or any wrongdoing” by Exxon Mobil itself. The company’s motion to dismiss the lawsuit is pending.
Meanwhile, the National Labor Committee, a New York activist group, accuses Wal-Mart of doing business with sweatshops in Bangladesh. Wal-Mart has pledged $2 million to relief efforts.
A Wal-Mart spokeswoman, Beth Keck, said the Bangladeshi government recently recognized the retailer for its efforts to police the wage and employment standards of its contractors there.
And environmentalist groups in India accuse Coca-Cola of improperly disposing of toxic wastes and overusing groundwater.
“We abide by all applicable laws in the more than 200 countries where we operate around the world,” said Lori Billingsley, a Coca-Cola spokeswoman. She said that a company plant in southern India is helping its neighbors cope with a drought.
Coke has pledged $10 million in tsunami aid. In India, the company distributed water, blankets, clothing and food, and its employees in India pledged a day’s pay to a government relief fund.
Community-aid efforts are proper responses by global companies, said Jagdish Bhagwhati, a Columbia University economics professor and a proponent of globalization.
Because multinational employers in the third world cannot raise wages dramatically without disrupting local economies, “I’d rather have them do something for the community,” he said.
“We haven’t had enough of that abroad,” he said.
Corporations are getting the message, said Mindy Lubber, executive director of the Coalition for Environmentally Responsible Economies, a Boston group representing green-minded investors.
“Without question, companies are more and more concerned about their reputations,” she said.
The Social Investment Forum, of Washington, estimated in a study published in November that socially active pensions, mutual funds, endowments and corporations managed 11 percent of institutional money — $2.2 trillion — in 2003.
Mutual funds marketing themselves as socially responsible are growing much faster than the industry in general, according to Lipper. As of Nov. 30, 96 such funds held $32.7 billion in assets, compared with $9.5 billion in December 1998.