Why the world needs the right data.

Amy Domini | September 2007 issue
The Massachusetts shore has lured visitors and new residents to its fabled beaches and healthy lifestyle for generations. There you find bicyclists along the paths, older folks practising tai chi on the village squares and strong swimmers plying the waterways. In this wholesome spot, women kept noticing that their friends were getting sick, dying. Breast cancer is practically epidemic on Cape Cod. Some women began asking why. The cancer zones seemed to follow water sources. These women gathered data on the release of poisons in the region and began to trace them. They were able to gather this data because of an unusual law. The Toxic Release Inventory mandates that facilities track and report on their release of certain hazardous materials.
This story is still playing itself out, but if the women learn why their friends are dying, it will be because of disclosure. Transparency is essential. Once the Sullivan Principals mandated reporting on progress toward equality in South Africa, it became obvious that there was no progress and civil society took action.
Yet today, virtually no mandatory non-investor-driven disclosure exists. Particularly in the U.S., corporate disclosure has grown out of reforms that date back to the 1930s, when it was essential that investors be reassured that they were being treated fairly.
This simple notion has led to unanticipated consequences. An industry of enormous proportions grew up with the sole purpose of allowing investors to evaluate the prices of financial instruments and trade them, with the idea that corporate interests must supersede the interest of other stakeholders. Financial impacts on the taxpayer, for example, are hidden. Today, society finds Wall Street pitted against Main Street about where to allocate costs and where to realize benefits.
This takes us to the role of responsible investors. We recognize the importance of mandated disclosure and seek to demand it wherever we can. But the failure of government to move quickly to institute it is no reason for us to sit still. We are not value-neutral about what will benefit us but demand our investments meet at least basic stakeholder standards indicating progress.
By moving forward ourselves, we have built the template for future legislation, while establishing the databases that even today help grassroots organizations sift through suspected causes of harm and pinpoint their sources.
The application of social criteria to investments is widely misunderstood but all-important. We cannot know today what needs it will meet, but we do know that the world needed data before it brought so much pressure to bear that 27 million people were given the vote in South Africa. We know that the toxic data that the women of Cape Cod are studying may save lives for centuries to come.
And we know that when accountability is mandated, behaviour improves. Nothing has been as powerful as socially responsible investing in moving disclosure standards forward. It is a legacy of which we can be proud.