Socially Responsible Investment Policy Philip Boyle, Ph.D. Vice President, Mission & Ethics

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Goals for today’s conversation Examine the moral logic of avoidance or proactive investment What are the possible justifications for investments? How far does a company’s involvement go before investments are restricted? –In avoidance of investments, what is the justification of 10/20% guidelines?

Case Comparison Companies ______________________ A B C D__E___F__G___H___I___J__ Proactive Approachx x Seeks Animal Rights Corporate Citizenshipx Employee Relationsx Environmental Protectionx Human Rightsx Avoids AbortionXx Alcohol Productsx Biological/Chemical Weaponsx Child Labor Exploitersx Discriminatory Policiesx For-Profit Healthcare Providersx x Gambling Companies Manufacture of Contraceptivesx Military Weaponsxx x Nuclear Weapons-Relatedxx x Oppose Moral Teachingsx Pornographyx Produce/Sell Pharmaceuticalsx Tobacco-Related Companiesxx Community Grants Program X

1.Tobacco - companies with 20% or more of their revenues from the sale of tobacco related products, the end use of which is human consumption. 2.Biological/Chemical, Military & Nuclear Weapons - companies with 20% or more of revenues from the operation, manufacture, distribution, or sale of biological/chemical, military & nuclear weapons. 3.Alcohol - companies with 20% or more of revenues derived from the production, distribution, or sale of alcohol. 4.Gambling - companies with 20% or more of revenues from the operation, manufacture, distribution, or sale of gambling equipment. 5.Pornographic Material - companies with 20% or more of revenues from business activities involve publishing or selling pornographic material. For purposes of this policy, pornography is understood as sexual depictions that demean or humiliate women, children, or men; undermine human dignity or promote hatred or violence; and appear in a work that lacks redeeming features which counteract or repudiate the values represented in the demeaning material.

What are the moral questions? What kind of moral cooperation is acceptable? Do certain investments enable unacceptable practices?

Primary & Secondary Interests Health care needs of community Sponsors Persons who may be harmed CEOs, CFOs, Boards

Values that should inform Capital enables mission Commitment to communities served Integrity

Options Blind-eye Limitation –Selective –Absolute Active engagement

Option Assumptions Blind-eye –Focus on core mission –Are organizations moral agents –Cooperation is too compliacted

Options Limitation –Organizations are moral agents –Some investments are immediate material cooperation –Selective Based on some local commitments –Absolute Clear prohibitions

Options Active engagement –No other way to change business behavior –Proactive strategy will be effective –Great benefit and little harm

Questions Is the investment “evil enough” e.g. gambling Stink test? Expressive quality sends wrong message? Consistency with other activity--alcohol

Conclusions Cooperation Scandal Justifications –Core business –Heritage and Mission –Whether institution can afford –Whether institution and accomplish gaols