The purpose of this article is to critique the main claim of the socially responsible
(SR) investment industry: that through strategic investing investors can transform
corporate power. I argue that businesses often respond to the demand by investors
for short-term economic growth by making choices that run counter to the interests
of corporate social responsibility; they reduce labor and material costs in ways
that disrupt workers, communities and the environment. I demonstrate my theoretical
claims using data from the 10 most common stocks selected by SR mutual funds. I call
these stocks the SR Big Ten. A simple roll call of the SR Big Ten, as well as a
thorough examination of each stock within it, reveals how problematic it is for
individuals to rely on investments to transform the corporate world.
aarp.org
(2004) AARP Best Employers for Workers Over 50: Honorees for
2004. URL (consulted 1 May 2004):
http://www.aarp.org/money/careers/employerresourcecenter/bestemployers/a2004-07-23-50honorees.html
2.
AFSCME
(2004) It Isn't Just a State or Local Problem. URL
(consulted 21 May 2004):
http://www.afscme.org/pol-leg/action4.htm
3.
Aglietta, M.
(2000)
Shareholder Value and Corporate Governance: Some Tricky Questions
. Economy and Society29(1):
146-59.
4.
Alinsky, S.
(1971) Rules for Radicals: A Practical Primer for Realistic
Radicals. Random House: New
York .
5.
Anderson, S.
and
Cavanagh, J.
(2000) Bearing the Burden: The Impact of the Global Financial
Crisis on Workers and AlternativeAgen
das for the IMF and Other Institutions. URL (consulted April 2002):
http://www.laborrights.org/projects/globalecon/ips/index.html
6.
Blackburn, R.
(2002) Banking on Death, or Investing in Life: The History
and Future of Pensions. Verso:
New York.
7.
businessethics.com
(2004)
100 Best Corporate Citizens
. Business Ethics Magazine. URL (consulted 21 May
2004):
http://www.business-ethics.com/100best.htm
8.
Cavanagh, J.
and
Mander, J.
(2004) Alternatives to Economic Globalization: A Better World
is Possible, 2nd Edition.
Berrett-Koehler: San
Francisco.
9.
db.riskwaters.com
(2004)
House of the Year - Crude Oil
. Energy Power Risk Management. URL (consulted 21 May
2004):
http://db.riskwaters.com/public/showPage.html
10.
Domini, A.
(2001) Socially Responsible Investing: Making a Difference
and Making Money. Dearborn Trade, a Kaplan Professional
Company: Chicago.
11.
domini.com
(2004) The Domini 400 Social Index. URL (consulted 18
April 2004):
http://www.domini.com/social-screening/index.htm
12.
Engelen, E.
(2002)
Corporate Governance, Property and Democracy: A Conceptual Critique of
Shareholder Ideology
. Economy and Society31(3):
391-413.
13.
Fligstein, N.
(1993) Transformation of the Corporate Corporation.
Harvard University Press:
Cambridge.
14.
Fligstein, N.
and
Shin, T.J.
(2003)
The Shareholder-Value Society
. Indicators2(4):
5-43.
15.
fortune.com
(2004)
100 Best Companies to Work For
. Fortune Magazine. URL (consulted 22 May 2004):
http://www.fortune.com/fortune/bestcompanies?promoid=cnnmoney
16.
Friedberg, L.
and
Owyang, M.
(2002) Not Your Father's Pension Plan: The Rise of 401(k) and
Other Defined Contribution Plans. Federal Reserve Bank
of St. Louis: St.
Louis.
17.
Friedman, M.
(1970)
The Social Responsibility of Business Is to Increase Its Profits
. New York Times Magazine 13 September
1970.
18.
Frynas, J.
(2005)
The False Development Promise of Corporate Social Responsibility: Evidence
from Multinational Oil Companies
. International Affairs81(3):
581-98.
19.
Ghilarducci, T.
(1992) Labor's Capital: The Economics and Politics of Private
Pensions. MIT Press:
Cambridge .
20.
globalexchange.org
(2004) FTAA Background. URL (consulted 21 May
2004):
http://www.globalexchange.org/campaigns/ftaa/background.html
21.
Gordon, D.
(1996) Fat and Mean: The Corporate Squeeze of Working
Americans and the Myth of Downsizing. Free
Press: New York.
22.
Harrison, B.
and
Bluestone, B.
(1988) The Great U-Turn: Corporate Restructuring and the
Polarizing of America. Basic Books:
New York.
23.
Hawken, P.
(1993) The Ecology of Commerce: A Declaration of
Sustainability . HarperCollins:
New York.
24.
Hawley, J.
and
Williams, A.
(2000) The Rise of Fiduciary Capitalism: How Institutional
Investors Can Make Corporate American More Democratic.
University of Pennsylvania Press:
Philadelphia.
25.
Hearn, K.
(2004) Drug (
Mon
ey) Traffic. URL (consulted 15 April 2004):
http://www.alternet.org/story/20007
26.
Henwood, D.
(1998)
Mutually Exclusive: Socially Responsible Funds Promise to Help You Do Good
as You Do Well
. They're Half Right . URL (consulted 21 May 2004):
http://www.motherjones.com/news/outfront/1998/11/henwood.html
27.
Hochschild, A.
(1990) The Second Shift.
Penguin: New
York.
28.
hrc.org
(2004)
HRC Corporate Equality Index
. Human Rights Campaign. URL (consulted 15 August
2004):
http://www.hrc.org/Template.cfm?Section=Corporate_Equality_Index&Template=/TaggedPage/TaggedPageDisplay.cfm&TPLID=23&ContentID=27305
29.
Jacobs, M.T.
(1991) Short-Term America. Harvard
Business School Press:
Boston.
30.
Jenkins, R.
(2005)
Globalization, Corporate Social Responsibility and Poverty
. International Affairs81(3):
525-40.
31.
Johnson, S.
and
Rogaly, B.
(1997) Microfinance and Poverty Reduction.
Oxfam International:
Oxford.
32.
Kelly, M.
(2001) The Divine Right of Capital: Dethroning the Corporate
Aristocracy. Berrett-Koehler: San
Francisco.
33.
Khandakar, E.
and
Danopoulos, C.
(2004)
Microfinance and Third World Development: A Critical Analysis
. Journal of Political and Military Sociology32(1):
61-77.
34.
Kinder, P.
,
Lydenberg, S.
and
Domini, A.
(1993) Investing for Good: Making Money While Being Socially
Responsible. HarperCollins: New
York.
35.
Klein, N.
(2001) No Logo: No Space, No Choice, No Jobs.
Picador: New
York.
36.
Klinger, S.
and
Sklar, H.
(2002) Titans of the Enron Economy: The Ten Habits of Highly
Defective Corporations.
United for a Fair Economy
. URL (consulted 19 May 2008):
http://www.foundation-partnership.org/pdf/Enron.pdf
37.
Krumsiek, B.
(1997)
The Emergence of a New Era in Mutual Fund Investing
. Journal of Investing6(4):
25-31.
38.
Lubbers, E.
(2002) Battling Big Business: Countering Greenwash,
Infiltration and Other Forms of Corporate Bullying.
Common Courage Press :
Monroe, MN.
39.
Markowitz, L.
(2005)
The `Corporate Social Responsibility' Master Frame: How Socially
Responsible Mutual Funds Attract Investors
. Paper presented at the Midwest Sociological Society
meetings, Minneapolis.
40.
Mokhiber, R.
(1999) Top 100 Corporate Criminals of the Decade. CorporatePreda
tors. URL (consulted 17 April 2004):
http://www.corporatepredators.org/top100.html
41.
Mokhiber, R.
and
Weissmann, R.
(2002)
The 10 Worst Corporations of 2002
. Multinational Monitor23(12).
http://www.multinationalmonitor.org/mm2002/02december/dec02corp1.html
42.
morningstar.com (consulted 16 March 2004).
43.
multinationalmonitor.org
(1999) The 10 Worst Corporations of 1999. URL
(consulted 16 March 2004):
http://www.multinationalmonitor.org/mm1999/mm9912.05.html
44.
multinationalmonitor.org
(2000) The 10 Worst Corporations of 2000. URL
(consulted 16 March 2004):
http://multinationalmonitor.org/mm2000/00december/enemies.html
45.
multinationalmonitor.org
(2001) The 10 Worst Corporations of 2001. URL
(consulted 16 March 2004):
http://www.multinationalmonitor.org/mm2001/01december/dec01corp1.html
46.
multinationalmonitor.org
(2003) The 10 Worst Corporations of 2003. URL
(consulted 16 March 2004):
http://multinationalmonitor.org/mm2003/03december/dec03corp1.html
47.
nb.com
(2004) Investment Process Summary. URL (consulted 17
April 2004)
http://www.nb.com/content/fund_fact_sheets/
48.
Osterman, P.
(1999) Securing Prosperity.
Princeton University Press:
Princeton.
49.
Ray, P.
(1997)
The Emerging Culture
. American Demographics19(2):
29-35.
50.
responsibleshopper.org
(2004) What Does Your Shopping Support? URL (consulted
15 August 2004 ):
http://www.responsibleshopper.org/
51.
Richter, J.
(2001) Holding Corporations Accountable: Corporate Conduct,
International Codes and Citizen Action. Zed
Books: New York.
52.
Shamir, R.
(2005) Corporate Social Responsibility: A Case of Hegemony
and Counter-Hegemony.
B. de Sousa Santos
and
C.A. Rodríguez
(eds) Law and Globalization from Below: Towards a Cosmopolitan
Legality, pp. 92-117.
Cambridge University Press:Cambridge
.
53.
Shapiro, J.
(1992) The Movement Since 1970.
P. Kinder
et al. (eds) The Social Investment Almanac: A Comprehensive Guide to
Socially Responsible Investing, pp. 8-23.
Henry Holt: New
York.
54.
sierraclubfunds.com
(2004) Overview . URL (consulted 15 April
2004): http://sierrclubfunds.com/sri_overview/html
55.
Social Investment Forum
(2003) 2003 Report on Socially Responsible Investing Trends
in the United States . URL (consulted 1 May 2004):
http://www.socialinvest.org/areas/research/trends/sri_trends_report_2003.pdf
56.
socialfunds.com
(2000) Microsoft Ruling Puts Corporate Responsibility in
Question. URL (consulted 1 May 2004):
http://www.socialfunds.com/news/article.cgi/article277.html
57.
Sparkes, R.
(2002) Socially Responsible Investments.
Wiley: West
Sussex.
