A different attitude to money
In the economy, the role of money is increasingly important. Money, in the form of capital, interest, shares and options, has become a product in itself. It bears no relation to its original function any more, which was to be a means of exchange. The fifty most powerful companies in the Netherlands include nine banks and insurance companies. Five of these are numbered among the top ten. Through mergers and take-overs, some of them are spreading themselves throughout the world1. The ever-increasing importance of the money-trade gives rise to the question of how we can control the role of money.
One obvious alternative use of money is to
donate or lend it to projects committed to sustainability. Investors can either directly
place money into projects that they wish to support, or else use an indirect route, if
they are concerned about an eventual guaranteed return or would prefer the decision-making
about which projects to support to be managed through specialist channels.
Green and ethical investment
There is an important distinction between the specifically green funds and the sustainable and ethical security funds2. 'Sustainable investment', it transpires, generally sounds more idealistic than it really is. In the end they are a form of investment which seeks the best possible return. These so-called sustainable funds in the Netherlands (namely, het Andere Beleggingsfonds, ABN Amro Duurzaam Wereldfonds, ASN Aandelenfonds, Robeco Duurzaam Belegginsfonds, ING Duurzaam Fonds and Triodos Meerwaardefonds) invest in the stock-market shares of well-performing companies selected for having the best principles within their industrial sector on social and ecological issues. It is a risky form of investment with generally high returns. The companies whose shares are bought are not bothered about where the capital comes from. In this respect, there is no difference to any other company in the stock-market.
Investing in green funds in the Netherlands (ABN Amro Groenfonds, ASN Groenprojectenfonds, Postbank Groen, Rabo/Rpbeco Groep Groenrente Fund and Triodos Groenfonds) has a very different dynamic and therefore a different value. Money invested is used to lend to companies and ecological projects. Thus projects relevant to the protection of nature and the environment are supported. The funds are concentrated in sustainable energy, organic farming, sustainable housing and the protection of nature and the landscape. In general, these investments - at least in the short term - have a far lower return than securities in commercial enterprises. State policy is aiming to reduce this difference by tax relief on 'green' interest and dividends - but only for those green funds recognised by the State.
At Triodos Bank not everything revolves around
money3. Important is also given to things which are hard to describe in financial terms.
Financial decisions should consider the interests of people and nature. Director Peter
Blom states: 'Energy consumption, nature conservation and human rights are not matters of
indifference any more, if they ever were.' This influences the way decisions are made
about what to finance. Companies and projects have to prove that they are sustainable and
support human rights in order to be considered by Triodos.
The bank offers its customers several saving options, each of which offers the possibility of donating the interest (or part of it) to a charity of their choice. There are more than 250 institutions and organisations which profit from Triodos's interest policy, from nationally-known organisations such as the AIDS Fonds and Vereiniging Millieudefensie to less-known small, local initiatives. One of the special options is the North-South-plan (Noord Zuid) and its related savings account, which was developed in co-operation with the development organisation Hivos, with the objective of strengthening the independence of companies in developing countries and reducing their dependency on the wealthy North.
Green and sustainability-orientated investors can contact Triodos directly. You will be registered at the certificates and shares issue-point and thus become a kind of shareholder of the bank. Shareholders are invited to an annual conference, but they don't have the right to vote on business issues. This right remains with the board members (Stichting Administratiekantoor Aandelen Triodos Bank) who are elected by the shareholders. The reason for this system is to prevent the bank from being taken over by another financial institution and losing its identity, objectives and independence4. The bank offers two shares funds: the Triodos Meerwaardefonds (value-added funds) and the Triodos Groenfonds (green funds). The Meerwaardefonds invests in the shares of companies which differ in social, ecological and financial attitudes from others. This fund combines a good financial return with social involvement. The selection process is primarily an exclusion process. Companies involved in nuclear energy, weapons deals, trade in animal skins, and the cigarette industry are not considered for investment. Products and services which are sustainable and considered important for society are promoted, for example organic farming, telecommunications, public transport, education, sustainable energy and the health service. Companies in sectors which are not considered sustainable are rated on a special scale. They can only be included if they belong to the top fifty in environmental/social ratings. These assessments are regularly reviewed.
The Groenfonds invests at least 70% of its
assets in green projects recognised as such by the state. The top priorities are organic
farming and wind energy. Other projects are: alternative technology, nature reserves and
sustainable building. The Groenfonds is officially recognised as a 'green institution', so
all their dividends are tax-free.
Algemene Spaarbank Nederland (ASN
The ASN Bank sees money as a tool through which to share the ideals of their customers. To achieve this, the bank invests in companies, organisations and projects which deal honestly and respectfully with people, animals, nature and the environment. The bank invests in wind and solar energy, recycling of resources and in nature projects. Special attention is given to projects in the Third World, health care and public services in the Netherlands, and animal protection. The bank works with organisations that work in these fields.
The bank has its roots in the modern trade union movement. Since its foundation in 1960 an ethical concern has permeated its activities. The bank claims to bring idealism and profit under one umbrella in an acceptable way. To make sure that investments in organisations and projects are idealistic, the bank scrutinises every organisation and enterprise. This is done using criteria which measure the values that characterise a responsible enterprise. Companies involved in nuclear industries, weapons, and bio-technology are definitely excluded, as are those which ignore environmental problems. Companies also have to prove that they promote human rights, if they have branches in countries where human rights are a concern. These companies have to prove that they have social employment conditions. These criteria are not considered in isolation: firms have to score a good result in all of them before the bank is prepared to invest.
ASN Bank is the only bank in the Netherlands which makes its business practices totally transparent. ASN offers various services, savings accounts, shares and mortgages. There are several different savings accounts: ASN Milieusparen (environmental savings) offers the customer the security that their money is invested in nature and the environment, and also offers the option of donating their profits (or part of them) to the funds of organisations active in human rights, animal protection, nature, the environment, health care or development. Typically, money is donated to well-known organisations like Greenpeace, animal charities, Pax Christi, Amnesty International, Astma Fonds Novib, etc.
With shares, customers can choose from various packages, such as the ASN Novib Fonds (share funds which are invested exclusively in the stocks of companies worldwide which are performing well on the stock market, which meet the criteria of ASN). Or there is the Andere Beleggingsfonds (a mixed fund which invests in shares and options) and the ASN Obligatiefonds.
There are two further special funds: ANS Groenfonds, which invests in recognised nature and environmental projects, having the advantage of tax-free profits; and the ASN Novib Fonds which supports small businesses, trade and agriculture in developing countries by offering inexpensive credit. Profits are quite humble but the social value is very high.
The bank is noted for its investment in relatively secure and accepted projects, which makes one wonder to what extent it now provides an incentive to choose an alternative economic path. Bonds (30% of the turnover) come mainly from the State and other banks. Also a large portion (13%) of customer investment, which is 50% of the total turn over, is lent to the Netherlands civil service, the EC, and local authorities. What is left is invested in traditional real-estate (40%), the health service and care for the elderly (17%), and education (4%), and also in other banks such as Nederlandse Gemeenten, the Achmea Hypotheekbank and the Nationale Investeringsbank (13% altogether).6
These credits are not dependent on special conditions. The reason is that all banks are obliged to invest part of their money in securities with the Nederlandskeche Bank. What the banks and the machinery of the State do with the money invested with them from the ANS Bank is not clear.
An outstanding initiative by the bank, in co-operation with Aktie Strohalm, has been the invention of an interest-free fund. This idea certainly challenges one of the basic principles of economic practice. The idea follows an example set by the Scandinavian JAK-Banken. The basic idea is to give no interest on savings accounts, but also to put no interest on loans. It is hoped that this procedure takes away the speculative nature of money. Instead of interest, customers receive points which enable them to borrow the same amount of money. Unfortunately the idea came to nothing because the tax office considered the credit points as taxable assets, which corrupted the principle of the fund.
Ethical investment: a fashion
statement, or hypocrisy?
Savings means power. Some people are using
this power, and the demand for ethical and green shares is rising, though admittedly, some
of the government's tax relief accounts for this. It is therefore not surprising that more
and more big banks offer ethical and green investment products. Such funds are not only
the preserve of customers of the Triodos Bank and ASN Bank.
Is ethical investment a fashion or hypocrisy?
On 12 October 2000 the ASN Bank and the ABF (Andere Beleggingsfond) organised a 'Day of
Ethical Investment'. The main speaker was Herman Wijffles, formerly a top-level executive
of the Rabobank and currently chairman of the SER (Social Economic Advice Commission). He
said that there is no going back. Sustainable economics is good practice, is worthwhile,
and must continue: 'The only formula with any chance of success is sustainable economic
growth which doesn't damage the environment.' One critical aside should be made, however:
'Unfortunately there are as yet no fixed standards; people can just do as they like. In
English one speaks of 'people, planet and profit' as the three ingredients which enable a
'richer' calculation of profit and loss than a single-track calculation of financial
results. It is called the 'triple bottom line'. Very apt!' 9
X - Y Solidaritaetsfonds
X - Y mainly supports projects and
organisations which can't get support elsewhere due to dealing with politically explosive
issues which normally don't receive money from government or governmental development
agencies. X - Y often acts as a start-up for initiatives which lack strong organisation
and have yet to establish themselves. The first step by X - Y is to offer help to set up
better organisational structures. It can also be the case that the money requested by such
organisations is too small to interest larger funding organisations which aim for a high
turnover. In giving out grants to projects X -Y favours small initiatives founded by their
members. 400,000 gilder are distributed annually.12
Examples are: the support of a document on the human rights abuses of Bolivian cacao farmers; a campaign for conscientious objectors to the army in Paraguay; a leaflet on human rights in Serbia; a workshop on globalisation in Russia; a conference for women in the sex industry in Taiwan; the creation of a documentation base on the circumcision of women in Kenya, and the Anti-MAI-Campaign in The Netherlands.
The fund is financed by donations from 2,500 people, plus some inheritances. In the eighties the financial situation was shaky but today it is stable. X - Y is also supported by small base-groups, donor groups in cities, and a club of people who donate the proceedings of their second-hand sales. Altogether X - Y receives donations and gifts of 700,000 gilder per year. 400,000 gilder are given out as grants, about 150,000 gilder are spent on campaigns and financial support for grass-roots groups, and the rest goes on office space, salaries (seven people are employed, two of whom receive their salary directly from the fund), and other administrative expenditure. About forty volunteers support X - Y in its project management and campaigns. These volunteers are recruited from social movements and socially-concerned research institutions. They form a network which can advise volunteers and employees about projects to be supported.
X - Y does more than just support projects.
They offer consultation on financial or organisational issues. They publish a guide to
funding, describing 150 funds available to grass-roots groups. On top of this, X - Y
initiates campaigns and participates in political debate. Politically and practically, X-
Y swims conscientiously against the stream.
Sustainability is important because the aim is for projects to have a long-term effect. The emphases are: consciousness-raising, enabling, the building of economic independence, and, often, the creation of information centres. Before giving grants, Mama Cash seeks advice via a network of local consultants. They can give information about the political, social and economic context in which the project functions. Marlise Mensink, the fundraising and publicity co-ordinator, says that 'women all over the world work with great courage, co-operation and inventiveness to improve the lives of their daughters, mothers, cousins, friends and neighbours. Mama Cash considers itself part of that community and therefore finances their projects. The agenda of the international women's movement is the agenda of Mama Cash. We don't want to dictate to others how to run their projects or which issues are important. We also think that the economic independence of women is the key to the improvement of their position in society."
A small portion of the donations and gifts goes to serve the fund's own financial needs and is invested in a sustainable way.
Mama Cash consists of different departments,
each with their own funds and own criteria for approving applications. The Guarantee Fund
specialises in making women financially independent by making the women and their
enterprises credit-worthy. This is achieved by securing loans for career-orientated
business-women starting out, if such a security is a requirement of the bank.
The Southern Fund supports independent groups of women in the Third World. Its main concern is to support the setting-up of new groups and projects which promote women's emancipation. The Eastern Europe Fund does the same for the former Soviet states and the newly independent states in Central and Eastern Europe.
The Inheritance Sisters is an independent network of women who have inherited money. The objective is to develop the confidence of these women to deal responsibly with their money and invest it for the benefit of society. Quite recently Mama Cash started a special project dealing with the economic empowerment of women.
Mama Cash can be supported through one-off or regular donations. Another way is to give an interest-free loan to Mama Cash. In recent years Mama Cash has made many appeals for donations, which has increased its budget substantially. A large part of its income is from private donors, and also from established businesses and charities. It is supported by the Dutch NOVIB, Hivos, Coraid, and Stichting Doen (The 'Do it' Foundation), as well as the John D. and Catherine T. Macathur Foundation - one the largest American funds. In 1999 the Dutch government gave a one-off sum.14 Compared to the 'big' funds Mama Cash is not so big. However in 1999, about 3.5 million gilder were given out in the form of donations, loans and securities, in response to about 550 requests.15
Although gender equality is legislated for in most countries, reality tells another story according to Mama Cash. As M. Mensink says, 'in the Netherlands, for example, it's mainly about established structures and a cultural change that is still ongoing. It's no different in the rest of the world. In Latin America, Asia and Africa especially, religion still has a strong influence on political and social discussions about gender roles. Mama Cash wants to try to break down these structures wherever possible."
From the outset, Mama Cash decided to finance small projects coming up from the grassroots of the women's movement. M. Mensink states that 'changes in society often start out from this level and therefore projects on this level deserve support. Grass-roots movements often don't have access to any finance. For a long time we were only able to give out small amounts of money, on average 5000 gilder per project, because we were quite small. Experience has often shown that supporting such women's groups is really worth it, because they're aiming for more than just money in a bank account. Financial support also means moral support. It means recognition of women's work, and it means solidarity.'
|Nils Buis worked as a graphic designer in his company 'Om tekst en vorm' and in the Utrecht housing project 'de bonte kaketoe'. He is a member of Solidair..||Jaap van Leeuwen is a consultant on sustainable technology with ADT (Advies Duurzame Technologie). He is a member of Solidair.|
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