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October 12, 2001
"New World Order" May Turn Out to Be World Interconnectedness
    by Mark Thomsen

Some social investment industry leaders believe one of the lessons from September 11th should be a focus on the long-term economic and environmental health of the whole world.


A month after the attacks on the World Trade Center and the Pentagon, Americans are trying to heed President Bush's call to return to "going about your business." For investors, not only in the U.S. but around the world, that involves understanding the future implications of the tragedies of September 11th. Leaders in the social investment industry have been trying to do just that in dealing with various questions from clients over the last few weeks.

Social investing has long advocated that a just society and healthy environment are in the interest of all investors, and that the best long-term investments are companies that strive to be exceptional corporate citizens. From this perspective, the events of September 11th indicate that social investing is needed now more than ever.

Peter Wilkes, Managing Director of the New York-based social and environmental research firm Innovest, referenced a September 21, 2001 speech given by Klaus Toepfer, Executive Director of the United Nations Environment Program in addressing client concerns.

Said Mr. Toepfer, "When people are denied access to clean water, soil, and air to meet their basic needs, we see the rise of poverty, ill-health and a sense of hopelessness. Desperate people can resort to desperate solutions. They…care little about themselves and the people they hurt."

Mr. Wilkes believes many investors will recognize Mr. Toepfer's point that there is a connection between poverty and hopelessness and support for intolerance and fanaticism. Mr. Wilkes also believes that some investors will wish to effect change through their own personal actions.

"In looking at the longer term investment picture, we believe there will be a renewed sense of diligence, support, and alliance with those companies that are taking responsibility for their role in society, proactively helping the environment and showing no tolerance for corruption, bribery and human rights abuses," said Mr. Wilkes.

John Liechty, President of MMA Praxis Mutual Funds, echoed the necessity of looking at the long term, stating that such an approach is a fundamental principle of financial planning. MMA Praxis Mutual Funds is the mutual fund arm of the Anabaptist Church.

"A long-term view acknowledges that our prosperity is intrinsically tied to the prosperity of others around the globe," he explained. "A long-term view acknowledges economic issues cannot be separated from other issues, like peace and justice."

Mr. Liechty acknowledges that long-term commitments are hard to maintain. But he believes Americans are a spiritual people and will draw on their faith to face the challenges ahead.

"This tragedy opens wide an opportunity to re-commit ourselves, to draw on a wisdom beyond ourselves, and to concentrate on long-term actions as we go about our everyday tasks in managing financial resources," he said.

The taking of thousands of innocent lives on U.S. soil certainly has permanently altered some investors' views regarding risk. Shari Berenbach, Executive Director of the Calvert Foundation, said that the September 11 tragedies were beyond the imagination of investors. The Calvert Foundation is a nonprofit organization whose mission is to help end poverty through investment.

"The collapse of the World Trade Center has rendered the word 'inconceivable' no longer operable," said Ms. Berenbach. "As a financial professional, this means a much greater and more fundamental understanding about the need to anticipate and protect against downside risk."

While noting Americans should be aware of increased risk, Ms. Berenbach also pointed out another important aspect of the September 11th aftermath - America is not the only country feeling grief.

"Perhaps the silver lining of globalization is the growing sense of community and interconnectedness around the world," she said. "It was, after all, the World Trade Center that was attacked, and the casualties came from all around the world…we all have mourned together."

A greater feeling of world interconnectedness may urge more people to demand that companies embrace social and environmental responsibility in their business practices. This not only bodes well for the social investing industry - a "we are in this together" mentality could also be a step toward eroding support for intolerance and fanaticism.

 

 
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