Nuns on Wall Street Reaching Critical Mass

Written by Lucy Soto Tuesday, July 31 2012

Executive compensation. Fracking. Risky derivatives. Labor abuses. Water quality. Private prison accountability.

Dig behind any of today’s most complex and tense corporate issues, and eventually you’ll most likely find … a nun or religious sister.

These women, both nuns who live monastic or semi-cloistered lives and sisters who do their work “in the world,” are using investments in their retirement funds, and the power of coalitions and community, to become the moral voice of Wall Street. Put away any stereotype or pre-conceived image you may have – whether it be of the demure, singing Julie Andrews-type, the “Flying Nun” variety or of the stern school disciplinarian.

These investing nuns are sharp, involved and vocal. And slowly forcing the corporate world to listen - and act.

“As shareholders, as a society that has expanded beyond anyone’s belief to reach across the globe, we believe we have global responsibility to make sure our earth … is taken care of as much as possible,” says Sister Nora Nash, who monitors the investment portfolio for her religious order, the Sisters of St. Francis of Philadelphia. “It’s looking for a common good.  There has to be a stepping off point where we become more responsible, where we look at our neighbor.”

“It really comes because of our mission -- peace and justice and systemic change,” says Sister Judy Byron, who coordinates the Northwest Coalition for Responsible Investment (NWCRI) in Seattle. The NWCRI was founded in 1994 as a program of the Intercommunity Peace and Justice Center. It has about 17 members and is open to any faith-based institution, religious community or its related organizations located in the Pacific Northwest.

“Companies are more willing to dialogue with us. When I first started, our work was mostly filing shareholder resolutions,” says Sister Judy, who belongs to an order of Dominican nuns based in Michigan. “And because I think faith-based investors have been at this work for over 40 years, the companies now know us. A CEO told us once that someone on his board said that if a religious shareholder brings an issue to you, you better pay attention because five years down the road it will be a big deal.”

It’s all part of a larger movement of socially responsible investing. It’s also called shareholder advocacy, or as some more critically call it, shareholder activism. It’s a different way to “occupy” Wall Street that has been slowly growing for decades.

And it’s reaping dividends.

The Forum for Sustainable and Responsible Investment, formerly the Social Investment Forum, says assets managed with some type of socially responsible guideline have increased more than 34 percent since 2005, while the broader pool of professionally managed assets has increased only 3 percent. The forum pushes investment practices that consider environmental, social and corporate governance principles.

It says nearly $1 out of every $8 that is managed professionally in the United States today – 12.2 percent of the $25.2 trillion in total assets under management tracked by Thomson Reuters Nelson – is involved in “sustainable and responsible investing”.

Recently, several religious groups, including Sister Nora’s Sisters of St. Francis of Philadelphia and the Benedictine Sisters of Mt. Angel, Ore., which are part of Sister Judy’s coalition, were in the news for pushing Goldman Sachs CEO Lloyd Blankfein to curb and disclose how it determines executive compensation. The groups had been successful in 2010 and 2011 in getting shareholders to vote on a shareholder resolution, although the votes were in single digits. This year, though, the Securities and Exchange Commission decided Goldman Sachs already had complied with the resolution.

But the victory, the women religious say, is in getting companies and the public to listen and talk about disparate pay and transparency.

The Sisters of St. Francis of Philadelphia and Sister Judy’s Northwest Coalition do much of their work under the umbrella of the Interfaith Center for Corporate Responsibility (ICCR).

ICCR was born 40 years ago, from the movement to squeeze corporations into making change in apartheid-choked South Africa. In 1971, it filed its first shareholders resolution with General Motors, asking it to withdraw from South Africa. The group began primarily with Episcopalians, with other Protestant groups following. Catholic groups joined in soon after that, and now account for the majority of ICCR’s faith-based membership, which also includes Jewish groups, Unitarians and secular groups, such as university pension funds who want to invest socially. In all, ICCR has roughly 300 groups with about $100 billion in investments.

Susana McDermott, ICCR’s spokeswoman, says women religious have been a cornerstone of the group’s work.

“Some of them have been doing this for decades. It’s staggering just how smart they are and sophisticated in doing this work. The press doesn’t always report this... It seems quaint that they are nuns,” McDermott says. But “this belies not only their command of the subject matter but their unflagging commitment to seek justice for our most vulnerable communities through corporate transformation.”

Sister Nora, who didn’t want to disclose her age but concedes she’s “been around the block,” juggles an array of issues.

She recently spent a day on natural oil rigs in the Tiadaghton Forest of southern Pennsylvania, checking out Anadarko Petroleum Corp.’s hydraulic fracking operation. Fracking is a controversial process of drilling down to shatter and crack shale rocks to release the natural gas inside. Water, sand and chemicals are injected into the rock at high pressure, allowing gas to flow out to the head of the well.

Not too long before that, she spent time on a South Dakota Native American reservation, visiting with the Lakota about the financing of a credit union.

She’ll also, in almost the same breath, talk about labor issues or environmental contamination.

“Basically, progress is never fast,” says Sister Nora, who has been doing this work for 11 years. She was a school principal for 15 years before that.

She adds, “You have to be patient to continue to work on an issue. Sometimes it gets hair-raising, and you struggle to reach an agreement. But in that struggle you know you have progress.”

One welcome development, says Sister Judy, is the addition of powerful investment management groups, such as Trillian and Calvert, who have expanded their offerings of “SRI Funds”, socially responsible investment funds. The relationships and networking the women religious have forged over the years combined with the investment groups’ well-versed staffs and research power make for a good combination.

“We have a way to get in the door, so we go in together,” Sister Judy says.

McDermott of ICCR says shareholder resolutions and advocacy began decades ago more as protest and has evolved to dialogue, with resolutions as more of a last resort. Many corporations are now hiring corporate social responsibility directors who call ICCR members for advice.

“What that underscores, really, is that companies are listening,” McDermott says, “and these active investors have a voice. Whether it’s social sustainability or environmental sustainability or ethical policies, these companies need to have these in place and report out about them publicly.”

The work will continue to grow because if there’s one thing Sister Nora, Sister Judy and their counterparts seem to have, it’s perseverance.

“We do it in a way that’s respectful, but we do our homework, and we know what we are talking about,” Sister Judy says. “We are doing it for the common good. Not for our own self-interest.”

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Lucy Soto worked as a reporter for the Atlanta Journal Constitution for nearly a decade. Before that she worked for the Associated Press. Born in Medellin, Colombia, she grew up in Greenville, S.C., and now chases after her four children in Atlanta.