I have been guilty of a bit of a “deer in the headlights” attitude since the election. This is my first blog since, and I don’t pretend to have insights beyond what others have offered. But my colleagues and I have been busy keeping up the good fight. Rather than deep analysis, let me at least reengage those of you who’ve followed my commentaries (a nice word for ranting) with a few observations:
Complacency is not the answer – although the world in which progressive investors now operate is indeed far more challenging than it had been. So, we’ve answered the challenge here since the election by tripling our efforts! My own practice as an investment advisor representative (IAR) of First Affirmative, operated under the banner of Colorado Sustainable Financial Planning, which has merged and grown to now include three advisors working collectively. We are all IARs of First Affirmative and use the name Sustainable World Financial Advisors (SWFA) for our operational services. Renee Morgan, a 17-year veteran of socially responsible investing, joined forces to establish SWFA. Now Laura Isanuk, a young but experienced advisor equally committed to our mission has joined our team. Max Shefte-Jacobs continues to support our efforts. Working together today, our practice is more forward thinking and powerful. Still, social investing here and elsewhere will vigorously face the challenges of a new administration, and will continue its work with an outlook well beyond that of the next four years.
We indeed intend to RESIST on a daily basis, and I am heartened by the efforts of others to do the same. Remarkably, we believe that we actually have the support of not only the progressive movement, but of much of corporate America in doing so. Many corporations have made it abundantly clear that they intend to build a sustainable future as defined by The Paris Agreement and that they need the skills of a diverse global workforce to prosper, valuing women and minorities today to ensure they are well represented in senior capacities in the futures. True, on each of these issues a great deal more remains to be done.
Unfortunately, others on Wall Street are drooling at the anticipation of deregulation and lower taxes, with no prospect that either will benefit anyone other than the most affluent among us. To me, the bump in the stock prices of big banks following the election is one of the most troubling indicators of future risk in our economy. Fossil fuel companies also got a boost. In the latter case, I worry more about the environmental impacts associated with taking the reins off these companies than about a return to more dependence on fossil fuels. What possible benefit can there be from uncontrolled methane emissions from gas wells, or abandoning clean power rules, allowing the dumping of coal slag into streams, or building a pipeline to move tar sands from northern Canada? What greater contradiction could there be than to pretend that science is fiction and Fox News offers facts?
The pretense that the actions of the new administration will bolster the prospects of the middle class or disadvantaged Americans is equally troubling. Some policy issues here, namely health care and tax cuts, will receive broad attention. The middle class, interestingly including much of Trump’s rural constituency, did push back on removing Obamacare. Whether they will recognize the false promise of disproportionate tax cuts remains to be seen.
On a more arcane level, Congress is now pressing efforts to dismantle many of the consumer protections of Dodd-Frank, and specifically one of the most important tools that social investors use to influence corporate behavior- shareholder resolutions. That is, it has been relatively manageable, and extremely effective, for us to file resolutions to ask corporate boards to truly act in their shareholder’s and society’s long-term best interest. Hearings were just held to make such action nearly impossible. Rather than it being possible for a shareholder with just a few thousand dollars in a company’s stock to do so, it’s now proposed that one must represent more than 1% of a company’s shares to bring a resolution to the table. As the Huffington Post observes, one would need to own $7 billion of Apple stock to file a resolution there. Needless to say, the social investment industry is working diligently to fight this proposal.
What comes next in this crazy, mixed up world? If there’s one thing we learned from the election, it’s that predicting the future is very difficult. I’d much prefer to continue our efforts to shape it. We’re in this for the long haul.
Mention of specific securities is not a recommendation to buy or sell that security. For information about the suitability of any security for your portfolio please see your investment advisor.