Slides for Joby Gelbspan's professional development training on Socially Responsible Investing (SRI).

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August 11, 2014
the Nonprofit Center, Boston, MA

2. Joby Gelbspan
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Backgrounds in:
• corporate accountability activism
• history of corporate power & resistance
• financial analysis & investment management.
NOT an investment advisor
Reachable via LinkedIn or www.sojust.org

3. Corporations are not Citizens*
* In reality, not legal obfuscation
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4. How can an investor be
“socially responsible?”
Making choices that promote our values
Solidarity
Owning your privilege taking responsibility for
financial choices & their effects on the broader
society, present and future
Sustaining yourself and to support your priorities
and those who depend on you
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5. Part I: Investment Terms & Concepts
Part II: Political Strategies
Questions & Discussion to 8:30 5

6. Terminology: Types of Instruments
Bonds Stocks
Corporate (or government) debt. A share of ownership of the company.
Lower risk, lower return. Unlimited upside, unlimited downside.
Returns interest and gain or loss on sale. Returns gain or loss on sale, and sometimes
dividends.
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7. Drivers/Risks
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Fixed Income (Bonds)
Yield determined by interest rates and
the creditworthiness of the company.
Inverse to interest rate movements.
Equity (Stocks)
Corporate performance
Industry and market trends
More volatility, larger potential growth
Yield determined by the profitability of
the company.

8. Terminology: Types of Investments
Individual securities (stocks or bonds) are sold
by shares or dollar amounts.
Mutual Funds are companies that buy
portfolios of investments and sell units which
represent shares of the entire portfolio.
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XYZ Fund My Share of XYZ Fund
Apple - $4M Apple - $400
Johnson & Johnson - $2M Johnson & Johnson - $200
Nestle - $4M Nestle - $400
General Electric - $10M General Electric - $1,000
Total Fund: $20M I have $2,000 in XYZ Fund

9. Mutual Funds
• Types of Mutual Funds:
– Equity: holds stock
– Fixed Income: holds bonds or other types of debt
– Balanced: holds some blend of the two.
• Funds require less ongoing monitoring, but
won’t perform as well as good individual picks.
• ETFs are exchange-traded funds, usually
following an index.
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10. Terminology: Market Capitalization
• # Shares Outstanding X Price
• Small Cap: $300M - $2B
• Mid Cap: $2B - $10B
• Large Cap: $10B +
• “Mega Cap” newer, imprecise, > 100B
E.g. Wal-Mart (WMT) market cap > $258B
$469B revenue > the GDP of most countries
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11. Choosing a mutual fund
• Investment objective – e.g. international stock
or exposure to a particular country or industry
• Fees vary widely between funds and make a
big difference for your long-term returns
• Actively or passively managed (index funds)
• Tool to diversify your portfolio
• Look for the prospectus and holdings
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12. Public Companies
Listed on stock exchanges
IPO – initial public offering
Subject to public regulations & disclosure requirements
Dow Jones Industrial Average = 30 corporations, including:
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3M
American Express
AT&T
Bank of America
Boeing
Caterpillar
Chevron
Coca-Cola
Dupont
General Electric
Johnson & Johnson
Kraft Foods
McDonald’s
Microsoft
Pfizer
Verizon
Walt Disney
Walmart

13. Identifying Public Companies:
Start with what you know
Before investing, understand the key factors
driving and affecting the business
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14. Investing for Value
• Long-term investing, buy and hold
• Seek investments where we understand the
long-term value and are ready to commit to
owning a share for appreciation over years.
• DIVERSIFICATION spreads your exposure to
each investment’s individual risks.
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15. 15
Time
Risk
• Two ways to make money in the market:
time and risk.
• Higher risk = higher return. The price of
the investment is more volatile over time.
• As long-term investors, time is on our
side. We can afford short-term declines if
we can wait for the right time to sell.

16. Quick Sense of the Room
Raise your hand for the statement which best
describes your investment goals:
• Saving for the long-term (> 5 years)
• Shorter-term goals: may need access to cash in
the coming 5 years
• Informing myself for when I have long-term
savings
• Organizing investors
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17. Asset Allocation
Mix of stocks, bonds and funds depends on our
two key factors: time & risk
Rule of thumb used to be: age % in fixed income.
E.g. at 30 years old, 70% stocks and 30% bonds.
Start conservatively, and spread your risks. 17

18. But these are unusual times…
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19. THE FACTOR OF TIME
 Long-term “buy and hold” investments
 Over time, you’ll get used to the ups
and downs and will get clearer about
your goals
 Make a couple of good choices, and
try to forget about them
 The most you should check your
investments is about monthly
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20. Questions at this point?
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Do we all feel comfortable with these basics first?
Next up: making politically-informed choices

21. Conscious Choices
Industry Exclusions
– Pharmaceuticals
– Prisons
– Military Contractors
Corporate Behavior
– Environmental responsibility
– Policies on gender or racial discrimination
– Best in class
Proactive Support
– Community lenders, infrastructure
– Clean energy
– Social ventures, microfinance
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22. Socially Responsible Investment
Companies (SRI’s)
Dramatic growth, wide range of products to suit
different investment goals.
Examples:
• Domini
• Calvert
• Green Century
• Pax
• Parnassus
• Walden
• Increasingly, 401(k) and other plans offer SRI
funds
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No longer a fringe movement:
Today, approximately $3 trillion
of the estimated $25 trillion US
investment market complies
with some SRI criteria.

23. SRI Funds
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Pro’s
 Investment Criteria, screens
 Build progressive capital
 Proxy voting
 Shareholder engagement
Con’s
 Limited definition of
“responsible”
 Diversifies risk and return
 Fees
Use these tools when they serve your plan

24. Shareholder Resolutions
• GMOs
• Fracking
• Board Diversity
• Packaging
• Climate change
• Marketing practices
• E-Waste
• Political interference
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25. Shareholder/Stakeholder Activism
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Changing policies & practices
Raising public visibility
Amplifying activism within the
Boardroom

26. Researching Corporate Behavior
• Corporate Website
• SEC.gov
• Limited only by your search terms!
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27. Researching Corporate Behavior
• Shareholder resolutions:
http://www.iccr.org/shareholder/trucost/index.php
http://faireconomy.org/shareholder_activism
http://www.greenamerica.org/socialinvesting/sharehol
deraction/index.cfm
• OpenSecrets.org
– Contributions
– Lobbying
– Revolving Doors
– Congressional Ownership
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28. Researching Corporate Performance
• Annual Report & Financial Statements
• Investor section of the website
• Yahoo! Finance or other investor coverage
• Consider the industry and the long-term value
proposition
• Assess the risks
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29. Yahoo! Finance (or Google, etc.)
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30. More Info
• Terminology / Glossaries:
– www.investopedia.com
– www.investorwords.com
• Researching investments or markets
– www.yahoo.com/finance or Google
– Bloomberg, other news agencies
– Commentators and blogs
e.g. Motley Fool: http://www.fool.com/
• SRI’s
– www.ussif.org
– http://www.socialfunds.com/ 30

31. Thank you for coming!
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…and cast your vote for the 2014 Corporate Hall
of Shame at www.stopcorporateabuse.org
Refuse to be intimidated
Continue to learn and share
Connecting for Justice
Thurs. Sept 11