|
Ethical Funds Inc. co-files shareholder resolutions with Wal-Mart and Citigroup
|
|
Ethical Funds is implementing its new Corporate Dialogue Program with shareholder proposals on predatory lending and sweatshop issues. On Nov. 24, Ethical Funds announced that it has co-filed a shareholder resolution at Citigroup Inc. calling on the company to develop policies to ensure that no employee or broker engages in predatory lending policies. “By participating in this initiative, Ethical Funds becomes the first mutual fund company in Canada to file a shareholder resolution that addresses the link between socially responsible business practices and company reputation,” said Robert Walker, Vice President, SRI Policy and Research. “To our knowledge this is the first time a mutual fund company has filed a resolution of any kind.” Predatory lending is a form of lending in aimed at people who don't ordinarily qualify for a loan, and are subject to abusive practices, excessive fees and interest rates, hidden costs, unnecessary insurance, and deceptive use of "balloon" payments. The shareholder resolution, which is being led by the Presbyterian Church (USA), will be addressed at Citigroup's annual meeting in the spring. Citigroup Inc. is one of the largest financial institutions in North America and the fifth largest sub-prime lender in the US. Its position as a significant sub-prime lender will increase with the acquisition of Associates First Capital, the second largest sub-prime lender in America. Ethical Funds currently invests in Citigroup, in part because of that company’s commendable support for micro-lending institutions and community investing in the United States and developing countries. “While Ethical Funds recognizes Citigroup’s contributions to communities through its Banking on Enterprise initiative and donations to the Enterprise Foundation, ACCION International, and the Grameen Bank in Bangladesh, we are concerned about alleged predatory lending practices at the Associates”, said Walker. Ethical Funds has also co-filed a shareholder resolution with Wal-Mart in association with the United Methodist Church Board of Pension and Health Benefits. The resolution addresses sweatshop issues and controversy surrounding the conditions under which products are being manufactured in developing countries. Socially responsible investors are filing the resolution to prompt Wal-Mart to report on its efforts to ensure that it is not purchasing from suppliers who manufacture product using forced labour, convict labour, or who fail to comply with fundamental workplace rights protecting employees’ wages, benefits, working conditions, freedom of association, collective bargaining and other internationally agreed upon labour rights. "At one time, Wal-Mart was lauded for its employee practices and efforts to address the issue of sweatshop labour," said Walker. "But over the past couple of years, Wal-Mart has become one of the more controversial companies among socially responsible investors. Divestment remains an option, but for the time being, many organizations, including Ethical Funds, have decided to use the voice strategy rather than the exit strategy. If the SRI movement can get an industry leader like Wal-Mart to take steps to address sweatshop issues, then major systemic changes may follow." For more information, visit Ethical Funds Inc.
|
