Business Discovers Social Concerns
NEW YORK — THE recent decision by three US tuna canners - StarKist, Bumble Bee, and Chicken of the Sea (Van Camp) - to stop buying or selling tuna caught in nets that may also have caught dolphins underscores the growing emphasis in corporate boardrooms on ethics. Critics insist that far too many corporations continue to remain indifferent to social concerns. Yet clearly, it's felt here, major US corporations are adopting, or renewing their commitment to, high standards of corporate responsibility and business ethics. Some of this is a reaction to the insider trading cases of the late 1980s, as well as the growing clout of consumer groups.
``We're learning that big corporations can very quickly make a substantial contribution [in ethical areas] if they have the will to do so,'' says Robert Bailey, executive director of a conference on business social initiatives held here April 17. The conference, ``Corporate Conscience: The Quiet Revolution in American Business,'' brought together representatives from such Fortune 500 companies as General Mills Inc., Digital Equipment Corporation and RJR/Nabisco Inc. The conference was sponsored by The Open Center, a nonprofit holistic learning center.
The new emphasis on corporate ethics is most pronounced in three areas, experts say:
Community outreach: Spurred by such ``good works'' groups as the Council on Economic Priorities, based here, many corporations are now seeking to do a better job of advancing women and minorities, provide day care programs, and disclose more corporate information.
Environmental affairs: A number of corporations are now touting recycling and waste management. Many of these programs are public-relations imagemaking, rather than actual environmental programs, experts note. But the very fact that companies now feel it necessary to be perceived as environmentally conscious is seen as a positive step.
At the same time, some mutual fund companies are now offering environmental funds, designed to enable individuals to buy stock in the scores of companies developing in the environmental sector.
Tighter security guidelines: Since the Alaskan oil spill, a number of companies have tightened oversight procedures to prevent environmental disasters.
In addition, virtually all Wall Street brokerage houses have bolstered surveillance of trading practices to prevent insider trading abuses. In the financial area, ``ethical investing'' became fairly prominent in the late 1960s and early 1970s.
Ethical investing is perhaps best illustrated by the Pax World Fund, established in 1970. The mutual fund does not invest in such sectors as arms production, alcohol, gambling, or tobacco, or with companies doing business with South Africa, says Anthony Brown, vice president of the fund.
Mr. Brown notes that Pax World is now focusing on natural gas, medical companies, and food producers. Last year the fund rose almost 25 percent, making it sixth in performance among the 60 balanced mutual funds in the US, according to Lipper Analytical Services. During the first quarter of 1990 fund performance was down slightly, but still ahead of the broader market, according to Brown.
A number of environmental funds have been started up during the past year, including the Freedom Environmental Fund in September and the Oppenheimer Global Environment Fund last month.
``We are not trying to be a goody-goody fund,'' says Kenneth Oberman, one of the two portfolio managers of the Oppenheimer Global Environment Fund. That does not mean that the fund doesn't look for morally sound companies, he notes. But the focus is on finding potentially rewarding investment opportunities in such sectors as pollution control, biotechnology, groundwater technology, and solid waste mamangement.