Genocide-Free Investing
Years after the genocide in Darfur was publicly acknowledged, millions of people are unknowingly and inadvertently investing in the companies that are funding this genocide. Investors entrust their family savings and pension funds to mutual fund and other investment firms, which in turn invest those savings in companies which help to fund genocide.
A broad base of major financial institutions invest in a small set of problem companies, particularly PetroChina. When confronted with this problem, these investment firms ignore the moral issue of investing in genocide.
Once they become aware, people are overwhelmingly opposed to being financially connected to genocide. In KRC Research’s 2007 study, 71% of respondents said companies should take extreme cases of human rights abuses, such as genocide, into account rather than base investment decisions solely on economic criteria. In that same study, 77% said they would switch to a different investment company if they learned that those managing their funds had significant investments in firms that were active in Sudan. Further, over 150,000 people have objected to financial firms about such problem investments. As SEC Chairman Cox said, "No investor should ever have to wonder whether his or her investments or retirement savings are indirectly subsidizing a ... genocidal state."
Reasonable people may disagree about what constitutes socially responsible investing, but few people want their savings to be complicit in genocide.
Join us in asking mutual funds and other investment firms commit to genocide-free investing.
- Click here to see mutual funds that have a genocide-free proposal pending.
- Click here to find out what you can do to support genocide-free investing.
- Click here to find out how you an easily submit a shareholder proposal on genocide-free investing.
- Click here for news on the SEC support for the shareholder proposal on genocide-free investing.
- Click here for a one page flyer on the campaign for genocide-free investing.
Making a commitment to Genocide-free Investing
We ask the Board of Directors of mutual funds and investment firms to commit to Genocide-Free Investing by adopting this resolution:
- The Board will institute procedures to prevent holding investments in companies that, in the judgment of the Board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.
Why we need commitment to Genocide-free Investing
- Financial institutions such as Fidelity, Franklin Templeton, American Funds and Vanguard are major investors in oil companies, such as PetroChina, that are the worst offenders involved in Sudan and helping to fund the genocide in Darfur.
- As a result, ordinary investors, through their mutual funds, family savings, and pension plans entrusted to these financial institutions, are inadvertently investing in genocide.
- When confronted with the problem of investing in genocide, many investment companies ignore the moral issue, accepting no principle governing their investments beyond financial returns and obeying the law.
- No ethical guidelines regulate the investment choices of the largest mutual fund companies and their investment managers.
- Just as the Global Sullivan Principles created enduring standards of ethical corporate behavior, a similar minimum ongoing standard is needed for financial institutions to renounce investments in companies that fund genocide.
Why fundamental changes are needed
Investors face multiple hurdles when attempting to make genocide-free investments.Few people look at the details of their mutual funds; they simply trust their investment company.Individual investors who do look discover that it is a daunting task to determine which are the problem companies and then research a fund’s current investments to avoid those companies.Also they have no assurances that their mutual fund managers will not invest in such companies in the future.In the case of 401k investments, individuals are limited by the number of funds offered in their 401k plan and may have no good options.When available, investors might choose Socially Responsible Investment (SRI) funds, but these are not offered by most 401k plans and also are more limited in the diversity of their offerings.Lastly, investors who would like to choose low-priced index funds are severely limited, since the international and emerging markets indices usually include even the worst offending companies
The challenge is to make the market for financial investments more responsive to the American public’s interest in not being complicit in the most egregious violations of human rights.
Q & A
- What is the connection between financial investments and genocide today?
One of today’s worst human rights crises is in the Darfur region of Sudan, labeled by the US government as the first genocide of the 21st century. The government of Sudan has continued to pursue genocide in Darfur for the last four years, using 70% of its oil revenue to provide arms and funding for the genocide, rather than economic development for the poor people of Sudan. Although federal law prevents most US companies from operating in Sudan, American financial institutions, in particular mutual fund companies, are major investors in the Chinese, Indian, and Malaysian oil companies involved in Sudan which are helping to fund this genocide. As a result, ordinary investors, through their mutual funds, family savings, and pension plans entrusted to these financial institutions are inadvertently investing in genocide. - Do mainstream mutual fund companies endorse any ethical standards?
Aside from Socially Responsible Funds, mainstream mutual fund and investment companies acknowledge no principle governing their investments beyond financial returns and obeying the law. Here are quotes from Fidelity, but they could easily be from the others:- "Fidelity portfolio managers make their investment decisions based on business and financial considerations, and take into account other issues only if they materially impact these considerations or conflict with applicable legal standards."
- "We believe the resolution of complex social and political issues must be left to the appropriate authorities of the world that have the responsibility, and capability, to address important matters of this type. And we would sincerely hope that they would do so wisely on behalf of all of the citizens of the globe."
- How would endorsing “Genocide-Free Investing” relate to targeted divestment from Sudan?
Endorsers of the principle should examine their current portfolio and identify problem companies involved in funding the genocide in Darfur. There are excellent resources available on the web, include the Sudan Divestment Task Force website, www.SudanDivestment.org. In addition, several financial firms from the Socially Responsible Investment community offer analysis and screening to identify companies complicit in supporting the genocide in Darfur. - Is “Active Engagement” consistent with "Genocide-Free Investing"?
Genocide-Free Investing requires companies to avoid future investments in companies that contribute to genocide. For companies with existing investments in problem companies, there are two acceptable options. If the holding is substantial enough that the shareholder could influence the problem company’s management to work toward an end to the genocide and the company is receptive to active engagement, then this course of action may be appropriate. If the holding is relatively small or the company does not respond quickly to efforts to engage, then the shares should be sold. - Who is proposing "Genocide-Free Investing"?
Investors Against Genocide is a non-profit organization dedicated to convincing mutual fund and other investment firms to change their investing strategy so as to avoid complicity in genocide. In particular, we want investment firms to avoid or divest holdings of PetroChina (Chinese), Sinopec (Chinese), ONGC (Indian), and Petronas (Malaysian), the four major oil companies that are partnering with the Government of Sudan and helping to fund the genocide in Darfur. The campaign works with individuals, companies, organizations, financial institutions, the press, investment firm employees, and government agencies to build awareness and to create financial, public relations, and regulatory pressure for investment firms to change. The ultimate goals are that investment firms adopt genocide-free investment policies, that the Government of Sudan ends its deadly genocide in Darfur. We work with individuals, companies, organizations, financial institutions, the press, investment firm employees, and government agencies to build awareness and to create pressure for investment firms to change.
Investors Against Genocide is the successor organization to the Fidelity Out of Sudan campaign, which proposed making commitments to Genocide-Free Investing on June 8, 2007, at a forum hosted by The Sullivan Foundation, in Philadelphia. - Tell me more about The Sullivan Foundation
The Sullivan Foundation's mission is to carry on the spirit and legacy of Reverend Leon H. Sullivan. The Global Sullivan Principles were created to be a catalyst and compass for corporate responsibility and accountability. The Global Sullivan Principles arose from the political action of Reverend Sullivan regarding South Africa and his desire to generalize from that experience and create a legacy of advocacy on behalf of Africa and the world’s most vulnerable people. Reverend Sullivan was a strong supporter of divestment in South Africa as a means to end apartheid. For more information, visit www.TheSullivanFoundation.org.
Although the call for committing to Genocide-Free Investing Investing did not originate with The Sullivan Foundation, it was conceived as a generalized principle focused on ethical investing, similar in spirit to the Global Sullivan Principles. Since none of the major financial investment companies have formally endorsed the Global Sullivan Principles, our hope is that they will adopt this minimum standard, making a commitment to Genocide-Free Investing.