As the world mourns the death of Nelson Mandela -- one of the most gracious souls ever to tread this earth -- we naturally contemplate his legacy, and what it means for each of us in our smaller orbits. For many investors, it was the anti-Apartheid struggle that revealed our ability to effect change through the power of our money. Our capacity to do so is as important now as it was during the darkest days of Apartheid.
Campaign against Apartheid
College students launched the movement against Apartheid in 1977, and it became a force to reckon with by the early '80s. Their campaign specifically advocated for divestment: that investors should sell shares of companies doing business with South Africa's Apartheid regime. The foundation of their argument was that none of us should profit from a system that brutally oppresses people. That there should be any controversy in that never ceases to amaze me.
The divestment campaign became so significant that it made pariahs of the dwindling cohort of companies still willing to transact with the Apartheid regime. The effect was so profound that Nelson Mandela specifically recognized the movement after his release from prison. In a 1990 speech at the Oakland Coliseum, Mandela acknowledged the Campaign Against Apartheid -- one of the main campus organizations -- by name, thanking them for their solidarity and contributions to the anti-Apartheid struggle.
Nobel Peace Prize winner Archbishop Desmond Tutu drew an explicit link in a 2010 piece he wrote in the Huffington Post.
In South Africa, we could not have achieved our freedom and just peace without the help of people around the world, who through the use of non-violent means, such as boycotts and divestment, encouraged their governments and other corporate actors to reverse decades-long support for the Apartheid regime.
I talked with Bennett Freeman, who got involved with the divestment campaign when he was a sophomore at Berkeley. Freeman recalls that South Africa's Apartheid regime "crystalized for investors the position that you could take a moral and political stand through your investment choices." Previously, socially responsible investing had largely been the province of faith-based groups, focused on excluding investments in weapons and alcohol,
Apartheid changed that.
"South Africa was the first contemporary concern that focused the attention of first-generation SRIs [socially responsible investors]." Freeman is now the senior vice president for sustainability research and policy at Calvert Investments, the first mutual fund company in the United States to divest its South Africa-linked holdings. Looks like he took the message to heart.
The movement that arose from divestment has grown up a lot over the years. Sustainable and Responsible Investment (SRI), as it's now known, is the fastest growing asset class in the world. People are becoming increasingly aware of and interested in the long reach of their investment dollars.
Perhaps the most encouraging development is that SRI has evolved beyond a moral stance to become a value proposition. More and more evidence is emerging that companies that create a positive impact on the broader world around them perform well in the long run, other things being equal.
Freeman characterizes Calvert's approach as moving "beyond [SRI's] moral and political underpinning, not to forsake or forswear it, but to move to a broader, affirmative proposition for the 21st century." He reminds us, though, that "the point about Mandela and South Africa is that while we now have a value proposition in 2013, we still have our roots in our willingness to make moral choices around our investments."
What matters to you?
I've heard a lot of vehement arguments over the years against the concept of SRI. Many people fiercely believe that companies' only responsibility is to return value to their shareholders, and investors' only duty is to analyze the factors that contribute to share price growth.
This simply stuns me. They're saying that there's this one area of life where we make decisions in a moral vacuum. Where the suffering of others is irrelevant. Essentially, they're saying to Nelson Mandela, "Apartheid isn't my problem, because I'm making money."
The beautiful thing is that we've learned how to invest thoughtfully and considerately while still making money. But we have to choose to look.
So what matters to you? You can invest in conditions that lead to hundreds of dead garment workers in Bangladesh, or in products that create market opportunities for marginalized African farmers. You can invest in the destruction of the world's coastal ecosystems, or in better food supplies for hungry people. Done properly, you'll make money either way, but which way will allow you to sleep at night?
Nelson Mandela told us that "a fundamental concern for others in our individual and community lives would go a long way in making the world the better place we so passionately dreamt of."
We investors are a community. If you wish to honor his extraordinary legacy, you can start with your own portfolio.
Sara Murphy writes a lot about SRI. Follow her on Twitter @SMurphSmiles. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.