Our world is increasingly interconnected and money circulates quickly among many players. The current financial crisis has highlighted above all else that we’re all in this global economy together, like it or not. That’s why I was encouraged by good news that will give average people a little more control over their money. The movement for more socially responsible investment policies and “genocide-free” investing has been gaining momentum for quite some time. Recently, two major institutional investors, TIAA-CREF and Vanguard, announced new policies that should go a long way in promoting socially responsible investing.
In a March 12th announcement, Investors Against Genocide explained the Vanguard news: “According to their March 10 filing, the funds’ trustees directed the firm to implement a formal procedure for regular reporting to them on companies in which they invest ‘whose direct involvement in crimes against humanity or patterns of egregious abuses of human rights would warrant engagement or potential divestment.’” While the jury’s still out on what practical effect this will have on Vanguard’s divestment, it appears to be a positive step that many advocacy groups will monitor closely in the future.
I was also very pleased with TIAA-CREF’s announcement that the company will dramatically increase its engagement on the crisis in Darfur. Their bold action builds on the socially responsible investing TIAA-CREF has been offering since 1990. Moreover, it reestablishes the firm’s leadership among those seeking new and better solutions to the problems we confront in our increasingly interconnected world.
TIAA-CREF’s stated policy — to “intensify pressure on… companies [doing business with the Government of Sudan] and divest from those that fail to take meaningful steps to respect human rights within a reasonable time” — can serve as a model for others who wish to ensure that human rights are not subordinated to a desire for financial gain. Intelligent investors should be able to make profits without enabling ruthless regimes.
It has become clear, after years of ineffective gestures, that extraordinary measures will be needed to end the violence in Darfur and to hold the Government of Sudan accountable for its atrocities. Complicity with the GOS through “business as usual” must be made socially and financially unacceptable.
By ensuring that their funds do not directly or indirectly support genocide, TIAA-CREF can help end atrocities that have taken hundreds of thousands of lives and driven millions more from their homes.
I commend these responsible firms on their important symbolic and substantive actions. I look forward to seeing even further progress in the investment community as the pressure mounts to become “genocide-free.” The cost of doing business with the Government of Sudan should become as financially prohibitive as it is morally abhorrent.
The author is a Member of Congress from Massachusetts and co-chairs the Sudan Caucus in the U.S. House of Representatives. This post is the fourth in a five-part series. Tune in next Wednesday to hear more from Congressman Capuano on Sudan.