Investing responsibly is not an option but an imperative, according to professor Prakash Sethi, renowned academic and senior policy advisor to the United Nations Global Compact.
Sethi, president of the International Center for Corporate Accountability at Baruch College, New York, spoke from wealth of experience advising on societal issues as diverse as the Exxon Valdez oil spill, anti-apartheid in South Africa and ethics and work practices in China and other parts of the world.
As New Zealand commences its Free Trade Agreement with China, Sethi told delegates at conference held last month by the Council for Socially Responsible Investment, that FTAs are good in that they create aggregate wealth at faster rate, but that effectively cheap products mean cheap labour.
“China is the world’s leading manufacturer and so its manufacturing conditions affect everyone. Production is diverse and without agreed safety standards. The problems include work conditions, wages and product safety and they will get worse before they get better. At present there is no Plan B.”
Robert Howell, CEO of the Council for Socially Responsible Investment, said the conference challenges business and government to ensure that working conditions and ethical behaviour are key consideration for investors.
“Yet, how can investors be assured about the type of investment they are making? How do we, so far from the rest of the world, know whether the practices of the offshore organisations we’re investing in are ethical and sustainable? What are the validated measures that we can use to verify actions with promise? And are our onshore organisations performing as we think they should?” he said.
“How are we currently doing? Not very well. The amount of money under fund management in New Zealand is little over $60 billion. Very little of that is under socially and environmentally responsible or SRI criteria. Government investments of the Crown Financial Institutions of roughly around $25 billion, are no better. Kiwisaver will provide individuals with some choice, but it may only bring small increase to the amount of SRI funds.”
Howell said the conference was aimed at opening up debate so that business and government translate generally held beliefs into ethical investment practice.
For more information visit www.csri.org.nz
