The negative views held by many of Corporate America are likely seen as only second to how politicians in Washington are viewed. But businesses are also acknowledged as holding the greatest potential to bring about positive change in ways that politicians and the courts have been unable to achieve. Recent corporate policy changes by Dick’s Sporting Goods and Walmart have increased this hope in what US companies might achieve in many different areas including those that are evaluated from a Socially Responsible Investment (SRI) standpoint. SRI criteria that is used to evaluate companies for investment purposes includes social justice issues. The most widely used criteria for evaluating a company’s “responsibleness” are summarized through the ESG acronym which stands for Environmental, Social, and (corporate) Governance.
As you likely know already, the most recent school shooting in FL prompted Dick’s and Walmart to distance themselves from playing a part in any future atrocities. The statements by both companies seem also to be an attempt to influence policy and public opinion. Dick’s sporting Goods will no longer sell assault weapons, high-capacity magazines, or guns of any type to customers under age 21. Walmart spokesman Randy Hargrove said Tuesday that his company, one of the nation’s largest gun sellers, reviewed its policy on firearm sales in light of recent events. “As a result, we raised the age restriction for the purchase of firearms and ammunition to 21 years of age. We stand behind our decision and plan to defend it,” said Hargrove.
Now some have argued that these moves may not be completely altruistic. Even if this is true, their motives are worth considering. We have mentioned often to our clients and on this blog that investing responsibly is also investing wisely. Selecting companies to invest in that are adhering to SRI principals might just be a good investment whether or not the investor is passionate about the values and causes behind those principals. SRI not only allows you to align your assets with your values, but it has been increasingly shown that it might actually produce a better profit or protect an investor from owning companies that suffer significant stock price declines due to because of, for example, ethical breaches or loss of shareholders due to consumer boycotts of one type or another.
The response by consumers after Dick’s announcement demonstrates why Corporate America should pay attention to what’s important to consumers in the SRI arena not only because it might be the right thing to do but because it’s advantageous to the success of the company. Over the weekend following Dick’s announcement, Customer traffic to the 700-plus-store chain grew 3.7 percent! Similarly at Walmart, and despite boycotts and social media threats against it following its Feb. 28 announcement, more customers flooded its stores compared with the weekend before its move.
This response by the public also shows that the influence of consumers can affect the profits of companies. Your dollars do matter, whether they are spent directly on the services provided by a company or through actual ownership in a company through the purchase of their publicly traded shares. If you’d like to find out more about how to make an impact with your invested assets, we would be happy to discuss the options and resources available to you.