Friday, April 18, 2008

The Quaker origins of SRI

As pointed out earlier, Socially Responsible Investing has grown into a multi-billion dollar phenomenon since its official beginnings only decades ago. These early starts were largely associated with divestment from companies involved with the Vietnam War and in South Africa during Apartheid.

But the roots of SRI go back much further - centuries, in fact - to actions the Religious Society of Friends took over the issue of slavery. While it is true that many Quakers were in fact slaveholders, the tide began to turn among this body of believers in the 1700s. More than one hundred years before the American Civil War, Quakers began to divest from the slave trade for reasons that had nothing to do with profits and losses.

Rather, sensing their ethical integrity at risk, these Quakers came to see putting an end to their financial involvement with slavery as the only practical course available. Given their efforts to avoid companies that profited from the slave trade, many within the socially responsible investing movement to this day credit Quakers with being some of the earliest practitioners of the attempt to apply ethical beliefs in the economic sphere.

This tradition is still alive and well as Friends are arguably one of the most socially active religious groups today, including in the field of SRI. A quick review of major Quaker organizations reveals that from the American Friends Service Committee to the Friends Committee on National Legislation to Friends Fiduciary Corporation, all have SRI policies guiding their investments.

2 comments:

Mark said...

I'm looking for references to confirm that the Society of Friends actions in regard to the abolition of slavery actually was an example of socially responsible investing and not just a religious or political action. The difference is that it has to be tied directly to investing in the slave trade. SRI is not boycotts, nor is it political action, nor is it religious beliefs. It's any of those things WHEN TIED TO INVESTING DECISIONS. So in order for me to attribute the origins of SRI to quakers, please provide references.

Matthew Hisrich said...

Hello Mark,
Thanks for writing. It would be helpful if you could share a bit more about what you're working on to give you exactly what you need, but I'll try to offer some initial thoughts.

First, I'm certainly not the first to draw the connection between SRI and Quakers. That's not to say Quakers are solely responsible by any means - just that as you say, their religious beliefs fed into their political and economic actions and this approach impacted others.

Most who cite the Quaker influence point to this incident: "in 1758 the Philadelphia Yearly Meeting, the foremost meeting in America, decided to remove purchasers of slaves from positions of authority and established a committee, which included John Woolman, to visit slaveholders who refused to free their bondsmen. Over the next sixteen years the abolitionists worked to convince their fellow slaveholding Quakers to free their slaves, and in 1774 the yearly meeting resolved to disown any member who owned, bought, or sold a slave, a policy put into action in 1776." You can find this quote here: http://muse.jhu.edu/journals/journal_of_the_early_republic/v025/25.1crothers.html.

Also, it might be helpful to look into James Walvin's "The Quakers: Money and Morals." He spends a great deal of time discussing how much control early Quakers had over the business transactions of their members - and how this faith-based control limited their options.