Clinton St. Quarterly, Vol. 6 No. 1 | Spring 1984 (Seattle) /// Issue 7 of 24 /// Master# 55 of 73

ET H IC A L rop the term ethical investing in casual conversation and the reaction you’re likely to get is,“Wasn’t that what Jerry Rubin was into before he started his networking parties at Studio 54?” That is an unfortunate, though common, association, for Rubin is to ethical investing what Gerald Ford is to the game of golf. Ford once earned an asterisk in the record books when he bounced a golf ball squarely off the head of an- innocent spectator, thereby becoming the first U.S. president thus to distinguish himself. Rubin made an equally graceless exhibition in 1980 when he announced his intended foray into investment advising with John Muir & Co., a New York-based financial consulting firm. Ethical investing is a financial revolution as solid as Muir was evanescent. It is not easily defined, for it is as complex as any other field of finance, a mesh of styles and opinions, statistical shell games and rude facts, hustlers and saints. One person’s ethical investment is another’s moral transgression, one’s notion of safety another’s ungodly risk. But taken as a whole, the idea that one’s dollar should be invested with regard to social consequence has mushroomed into a multi-million-dollar investment movement. Measured against the hard gray standards of Wall Street, ethical investing is at best a guerrilla campaign, but it is one that has, in the past 15 years, redirected hundreds of millions — some think billions — of investment dollars away from the dark side of corporate America toward what Next Economy author Paul Hawken calls “ areas that address real human need” : consumer coops, inner-city redevelopment, alternative energy, small businesses, family farms, worker-owned companies, corporations with enlightened policies toward their employees, their products, the environment. Like any successful guerrilla campaign, ethical investing is a series of pincer attacks, strong steely fingers reaching into the American economy, manipulating it from many sides: It is a new breed of financiers come of age in the 1980s, social activists who have earned the tools of power on Wall Street but whose vision is firmly rooted in the activism of the '60s and 70s. It is religious leaders who have marched down from their pulpits and into the boardrooms of the nation’s largest corporations, backing their message of moral courage with economic muscle. It is an increasingly aware economic elite following through on its sense of noblesse oblige with the millions of dollars at its command. And it is a growing army of good common folk who have tucked away a dollar here and a dollar there, and who now, in the words of economist Hazel Henderson, “ have stood on their doorsteps and smelled the rot and can no longer let what they do with their money counteract what they do with their lives.” If the range is broad and the boundaries vague, the results are real. A few recent examples: • The Lutheran Church loaned half a million dollars to the Alabama Rural Council, giving the ARC the financial leverage it needed to secure $2 million in Small Business Administration loans to build low- income housing. • The Teachers Insurance and Annuity Association/College Retirement Equities Funds, the nation’s third-largest private pension fund, voted to screen its $9 billion in investment capital through a strict set of ethical criteria. • The Calvert Group launched its $20 million Social Investment Fund, which went against all the rules of Wall Street by basing its money market and mutual fund portfolios on ethical considerations. It invests only in businesses that are nonnuclear, nonmilitary, proconsumer, pro- environmental. Its board of advisors includes the likes of Armory and Hunter Lovins, Robert Rodale, and Hazel Henderson. And it defies all expectations by outperforming both the Dow Jones and money market averages. • Three manufacturers of infant formula — Nestle's, American Home Products, and Bristol-Meyers — succumbed to shareholder pressure brought by groups affiliated with the Interfaith Center for Corporate Responsibility and agreed to conform to marketing codes that will end "baby-bottle disease" in the Third World. The list goes on, solid evidence that the most basic unit of American capitalism — the investment dollar — is being used to fight the good fight. “ Ethical investing is really survival investing,” says Duane Elgin, author of Voluntary Simplicity. “The American public has begun to realize that the game of Wall Street roulette, of stockbroker speculation based on greed and fear, is a self-fulfilling dynamic that just doesn't promote a healthful economy. What this sudden rise in conscious investing is telling us is that there is hope beyond the current economic madness.” w W W herever you go in the world of ethical investors, two names keep popping up: Zevin and Schwartz. If ethical investing is a guerrilla campaign, Robert Zevin and Robert Schwartz are the generals. Robert Zevin has been wrapped up in one radical cause or another for most of his life. He was an original member of both the Student Nonviolent Coordinating Committee and the Congress on Racial Equality. With Mark Raskin and Benjamin Spock during the Vietnam war, he founded the antidraft organization Resist; he was the principal author of “Call to Resist Legitimate Authority,” for which Raskin and Spock were later indicted. He founded the U.S. Servicemen’s Fund to support the Gl antiwar movement. Over the past decade he has involved himself in neighborhood organizing and anti-nuclear and environmental campaigns OV E R M O R E T H A N A D E C A D E O F S O C IA L IN V E S T IN G , S C H W A R T Z HAS C O N S IS T E N T L Y O U T P E R F O R M E D T H E D o w JO N E S A V E R A G E , A N D H E CAN C O N V IN C IN G L Y D IS P E L T H E M Y T H T H A T S O C IA L IN V E S T IN G IM P L IE S G R E A T F IN A N C IA L R IS K . across the breadth of his home state, Massachusetts. Given this background, you’d hardly expect Zevin to be a vice-president of investment firms, or to direct some $350 million in investment capital. But that is exactly who he is and what he does. For Zevin, the jump from political activist to portfolio manager was both logical and simple. While teaching graduate students in the 1960s, he became active in the antiwar effort, devoting much of his free time to fundraising. At the same time, he held a small portfolio of stocks, which, he says, “were a hobby for me, the way chess and poker are for other people.” The portfolio was a game, a test: How well could he do with stock selected for their political merit — specifically, their nonsupport of the war? Not too badly, as it turned out, and when friends began asking him for investment advice, Zevin took the next step, registering as an investment advisor. “ It took about an hour," says Zevin. “ It was the easiest thing in the world to do.” Meanwhile, his fundraising had introClinton St. Quarterly 11