"The penalty good men pay for indifference to public affairs is to be ruled by evil men." attributed to Plato

"Bad men need nothing more to compass their ends, than that good men should look on and do nothing." attributed to Edmund Burke

Let's between us make the world a better place.

Wednesday, 25 May 2011

Glencore's appalling press coverage

The commodity trader Glencore, one of the most powerful global companies, has been in the news with its flotation on the London Stock Exchange, to raise funds for buying rival mining companies. But it “has received some appalling press coverage during the lead up to its listing …culminating in last week’s allegations in The Times that the CEO had failed to respond to ten African children who had written begging him to stop the pollution from a mine that was blighting their lives…On the day this was being reported around the world, Glencore was listing and Mr Glasenberg [the CEO] became an instant
billionaire with a personal fortune of almost £6billion.”

I am quoting Niamh O’Keeffe, founder of leadership consultancy CEOassist, who said the sensitivity and controversy surrounding Glencore’s industry made it more vital than in many other sectors for the chief executive to put in place a lasting legacy of good.
Read the full story at Director of Finance Online.

This raises the whole question of ethical investment. How many of us will be buying the shares hoping to make a quick profit, ignoring the plight of those children, and certainly many others, from the effects of Glencore’s polluting activities? Not only pollution seems to be at stake. There was a call for greater transparency of the company’s activities from a Christian Aid spokesperson on last night’s Channel 4 News, who was expressing concerns about Glencore’s activities.

But it isn’t only direct stock investments that are relevant here. Many of us own company stock, some of us perhaps without even knowing it, or at least thinking about it, because it is out of sight in our pension funds (although the deep recession at the end of the first decade of the new millennium, and the turmoil on world financial markets, brought such funds sharply into focus for many). Businesses must now be more accountable for their green credentials. But what about those companies that still operate unethical work practices. Those holding pension funds delegate full powers of investment to the fund managers who will be motivated and driven by the need to maximize profits and growth for the funds in their charge. As major shareholders these funds have enormous powers and are not likely to consider the ethical views of the individual pensioners against the overall drive for growth. It may seem that the individual does not have a voice. But we can have our say; we can influence others. All it needs is knowledge and courage and the support of other like - minded people. It can be done. Have you ever questioned your pension fund managers on this?
Does the small shareholder really know or even care how the company operates as long as he receives his regular dividend income? Can he possibly understand the full implications of the company’s business, how it treats its employees, how it deals with its waste, how it invests its own money. So many shareholders make their investments motivated solely by profit, without any regard for the ethical considerations. This is no less true of buying shares than buying consumer goods. And purchasers of the Glencore stock should be asking questions of the company.
The implications of all this are enormous. As individuals we may unwittingly be supporting the continuing suffering of communities near to a company’s activities (the Glencore example being a case in point.) Or we may be helping to fuel warfare, for example, by carelessly investing or allowing our pension funds or banks or investment funds or unit trusts to invest in any company involved along the way with the production of weapons.

I pray for there to be a shift in investment attitude, towards what is ethical, not what will make us the most money regardless of how that money is generated.

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