I recently watched the 2003 documentary “The Corporation” again, a film that inevitably gets me thinking about switching careers. But for now I will continue to believe that it’s better to incite change from my position inside the investment industry rather than just throwing my hands up in resignation. I see just enough progress on the part of some corporations to maintain faith in the value of what I do for a living. When building a socially responsible investment portfolio, I choose from a list of about 40 companies that don’t cause meto lose sleep at night thinking about dead birds, or slave labour, or nuclear meltdowns. I’ve followed the three companies highlighted below for years now. In fact I wrote about two of them almost 9 years ago in the summer of 2002, and they have since proven to be very good businesses. They have also rewarded patient investors who can shut out the daily noise of the market and remain focused on companies that are sustainable over much longer periods of time. Have a walk through the aisles at Thrifty Foods and take a look at who makes much of the healthy stuff on the shelves. Yves Veggie cuisine, Celestial Seasonings Herbal Teas, and JASON skin moisturizer are on my regular shopping list, and all are packaged by Hain Celestial (HAIN-NASDAQ) Those very good products are just the tip of what they produce and package, which runs the full gamut of health foods and skin care items. And if you’re looking for GMOs, you won’t find them in any of this company’s goods. The stock recently traded around US$26, up from $16 when I covered it in 2002, and well above its issue price of US$10 in 1997.
Speaking of Thrifty Foods, they are of course just one of several grocery stores in our community. Their owner is Empire Company (EMP.A-TSX), who also own the popular Sobeys chain of grocery stores. Empire pays a dividend on their common shares, and owning them gives you a vote in company affairs. Maybe it’s not the most socially responsible kind of investment, but there is a lot to like about the way they do business, and Thrifty’s has clearly attracted a very loyal customer base in communities across British Columbia.
I don’t think this town will ever see a Whole Foods Market (WFMI-NASDAQ). I can’t see how we need one given our fantastic farmers markets, the very popular and well-stocked Edible Island, and the scores of local merchants who produce some wonderful local produce that you won’t find in Thrifty Foods. Nevertheless, Whole Foods is a fixture in many cities around North America, and their commitment towards sustainability is illustrated by their comprehensive alternative energy approach. Whole Foods was the first Fortune 500 company to purchase wind power for 100 percent of its electricity use across its United States operations. And no GMOs here either. Whole Foods traded around $5 for much of the 1990s, reached $70 in January 2006, dropped to $10 midst the market despair two years ago, and now trades for over US$50.
It is a commonly held view that corporations exist solely to maximize profit. The corollary is that all social and environmental motives take a back seat to the profit motive. So why would a company like Whole Foods Markets choose to buy more expensive renewable energies if the higher cost hurt the bottom line? Perhaps forward-thinking corporations understand that while ‘green’ may cost more in terms of dollars, the goodwill that is built with consumers will actually improve the bottom line.
Many very loyal shoppers are clearly prepared to pay a premium for goods from a company whose policies reflect the highest social and environmental standards. As a result, economists have discovered that financial costs do not exist in a vacuum, and accountants can now measure a ‘triple bottom line’ that includes social and environmental costs and benefits, not just financial ones.