GM's Corner: We All Can Invest in Corporate Responsibility

Jon Roesser, General Manager, Weavers Way Co-op


"Plastic Reduction at the Co-op"

Wednesday, Jan. 17, 6-7 p.m.
Community Room
555 Carpenter Lane, Mt. Airy

What’s the answer to the problem of packaging that’s sustainable but still safe and affordable? (“More plastics,” said no Co-op member ever.) Join the discussion with GM Jon Roesser, members of the Weavers Way Environment Committee and other interested staff and shoppers.

For more info and to RSVP:

or contact Membership at members@weaversway or 215-843-2350, ext. 119.

I suspect not many Shuttle readers are in the oil-exploration business, so chances are you’re probably unfamiliar with Petrochina, a company with a name that sounds like it could be owned by a James Bond villain. 

But Petrochina is, alas, all too real. Huge (market capitalization: $219 billion), totally unscrupulous and backed by the morally uninterested Chinese government, Petrochina happily takes the pursuit of profit to frightening depths. 

Among other nefarious pursuits, for the last decade or so, it has bankrolled the genocidal government of Sudan so as to exploit that country’s oil resources. Petrochina’s investment in Sudan effectively negated sanctions imposed by the United States and other countries, allowing the Sudanese government to continue its murderous ways. 

As the president of Sudan said, “Just when some countries gave us sanctions, God gave us oil.” 

I’m not sure God had anything to do with it, but Petrochina sure did. Thanks to the profit-before-everything lens through which it sees the world, Petrochina is associated with the deaths of at least 300,000 Sudanese. 

And guess what? I own it.

Now before you judge me, it’s quite possible you own it too. Here’s how:

Like most Americans, I save for retirement primarily through my employer’s 401(k). To comply with IRS regulations, 401(k) plans must offer participants a broad range of investment options (domestic stocks, international stocks, large-cap, mid-cap, small-cap and so on). 

These investment options come in the form of mutual funds, which take the assets of many, many investors and use them to buy the stock of many, many companies. 

Retirement-planning professionals preach the importance of diversification. Keep some of your money in domestic stocks, some in international stocks, some in bonds, some in cash. 

Play this game right, and some day you’ll own your own vineyard, or private island, or whatever. 

Since 2014, the Co-op’s 401(k) has been through Vanguard, the Malvern-based mutual-fund giant. Switching to Vanguard was very good for the Co-op’s retirement-plan participants. Fees are low, investment options are diverse and returns are generally good. 

But Vanguard’s style of investing is passive. The heart of its model is “index investing,” in which a mutual fund’s holdings match a particular index, like the S&P 500 companies. 

One of the funds available in our 401(k) plan is the Vanguard Total International Stock Index Fund (VGTSX), which at last count has investments in 6,132 non-U.S. companies. One of those companies is Petrochina, and since I have some of my retirement savings in this particular fund, presto: I own Petrochina. 


Vanguard, along with other big mutual-fund companies, has responded to squeamishness among investors by adding “social” index funds to their lineups (alternatively these are called “green” or “sustainable” funds). 

Vanguard’s Social Index Fund (VFTSX), which is also part of the Weavers Way retirement plan, avoids investments in companies involved with weapons, tobacco, gambling and nuclear power. 

That’s a good start, but it doesn’t stop the Social Index Fund from investing in companies like JP Morgan, Johnson & Johnson and Nestlé. These companies might not be Petrochina, but they’re not very socially conscious. 

There are mutual funds out there that have stricter criteria than Vanguard’s Social Index Fund, but because most of these funds tend to be smaller and more volatile than their benchmarks, offering them in a 401(k) risks breaching fiduciary obligations. The plan sponsor (the employer) cannot offer plan participants (its employees) investment options that the IRS deems reckless or irresponsible. 

And so every week, as each of us gets one pay period closer to retirement, a steady stream of our hard-earned wages flows into mutual funds that invest our money based on maximizing return and little, if anything, else. 

But this steady stream of money is where the hope lies. If, as Benjamin Disraeli said, “money is power,” then American workers, through our retirement savings, have power we have so far not unleashed. 

Advocacy groups like Investors Against Genocide are starting to lead the charge, pressuring mutual-fund companies to sell their holdings in companies associated with Sudan and other thug governments around the world. TIAA-CREF, T Rowe Price and American Funds have all taken steps forward. 

Vanguard alone has investments of $4.4 trillion (that’s right, trillion). That’s a lot of money. That’s a lot of power. 

And that power can force the companies in which we invest to do a better job. 

We are still a moral people. We can insist our money is invested in ways that reflect our morality. 

See you around the Co-op.