June 9, 2009
Domini Authors
Featured in Finance for a Better World
Domini officials contributed two chapters to Finance for a
Better World: The Shift Toward Sustainability, a new book on sustainable
investing published by Palgrave Macmillan. The two chapters focus on how
socially responsible investing can address short-term thinking in our financial
markets and improve corporate human rights performance, respectively.
Steve Lydenberg, Domini’s Chief Investment Officer, argues
that socially responsible investing can remedy the short-term thinking that has
plagued our financial markets. “An excessive focus on short-term profits has
various detrimental effects,” writes Lydenberg. “It causes corporate managers
to misallocate assets. It introduces dangerous volatility into financial
markets. It means society must divert productive resources to repairing
environmental and social damage done in the headlong pursuit of profits.” Lydenberg
suggests that social investing, with its focus on long-term social and
environmental sustainability, can help to refocus finance on the long-term.
Adam Kanzer, Domini’s Managing Director and General Counsel,
draws on his experience as the head of Domini’s shareholder activism program in
a chapter examining the use of shareholder proposals to address corporate human
rights performance. His chapter outlines the legal basis for these proposals
and shows how nonbinding shareholder proposals have successfully influenced
corporate behavior even when they fall far short of a majority vote. He points
out, for example, that the shareholder proposals that helped bring Reverend
Leon Sullivan to the Board of General Motors received less than 3% of the vote.
Sullivan later authored the Sullivan Principles to guide businesses in
apartheid-era South Africa, which played an important role in ending apartheid.
According to its publisher, Finance for a Better World “provides an overview of current advances
regarding the integration of sustainability in the financial sector. Its
originality lies in the fact that it does not focus exclusively on a particular
aspect of this emerging trend, but instead, presents various illustrations — or
instance in the fields of SRI, sustainable banking or innovative investments —
of what can be considered as the beginning of a paradigm shift in global
finance.”
The book was edited by Henri-Claude de Bettignies, the EU Chair Distinguished Professor of Global Governance
and China-Europe Business Relations at CEIBS, Shanghai, China and
François Lépineux, a Research Fellow at INSEAD, and
Professor and Head of the Center for Responsible Business at ESC Rennes School
of Business, Brittany, France.
