Gates Foundation Revokes Pledge to Review Portfolio

NewsCloud writes "After the LA Times reported that the Gates Foundation often invests in companies hurting the very communities Bill and Melinda want to help, the Seattle Times reported the foundation planned 'a systematic review of its investments to determine whether it should pull its money out of companies that are doing harm to society'. Shortly after that interview, the Gates Foundation took down their public statement on this and replaced it with a significantly altered version which seems to say that investing responsibly would just be too complex for them and that they need to focus on their core mission: 'There are dozens of factors that could be considered, almost all of which are outside the foundation's areas of expertise. The issues involved are quite complex...Which social and political issues should be on the list? ... Many of the companies mentioned in the Los Angeles Times articles, such as Ford, Kraft, Fannie Mae, Nestle, and General Electric, do a lot of work that some people like, as well as work that some people do not like. Some activities might even be viewed positively by some people and negatively by others.'"

Re:Damn good point.

[arivanov]

The impact of a responsible investment policy on the money scale of GF will exceed the results from donating proceeds by an unimaginable magnitude.

While the money it is giving to good causes may sound great, it is nothing compared to the possible impact of running a strictly "responsible investment" policy with a money chest of their size (Most of BG money and most of the wizard of Omaha money nowdays).

This will turn the stockmarket bottom up, upside down and leave it on its head for a very long time. Money this size will cause a large number of companies to accept responsible corporate polices in order to be eligible for investment. You cannot just ignore it or turn its back on it. This in turn will force move of other investment and so on and so on.

I can bet that the perspective of this happening has scared all those pyramid jugglers with "quantitative models" shitless. I can bet that the real reason for BGF to abandon the policy 2 days after stating it is that Gates personal phone (the one not published in the phonebook) did not stop ringing during that period.

So this most likely is an order from above and it sucks. A money chest this size which is bound by "responsible investment" covenant may have forced many companies to assume more responsible polices and ultimately changed the world to the better much more than the money GF gives away to good causes. Everything else aside, its effect would have been much more long term.

News Flash

[billcopc]

News Flash: There is no such thing as philanthropy anymore. This is just another form of lobbying. Does Kraft really need research funding when they already own half the shelf space in every grocery store and 7-11 in North America ? Kraft never helped anyone but its own damned self. What about 3M and their many innovations in the medical and engineering fields ? What about the OLPC project ? I could think of lots of places where research funding would benefit society at large.. Kraft and Ford are not on that list.

Let's duscuss why this is hypocritical

[Socguy]

Reading over most of the comments it appears that most people seem to think that Gates is perfectly justified to invest wherever he wants with no real consideration of the companies he invests in.

Most of the supporting comments seem to fall into these categories:

1. It's too difficult to judge how socially responsible a company is.

2. A socially responsible company is a relative term.

3. If Gates didn't invest in a company for moral reasons, it wouldn't matter because someone else would. Thereby depriving his charity of funds while doing nothing to stop an abuse.

First off; we must agree that companies can have a impact on the well being of the countries and communities they operate in, be it positive or negative. I think it's pretty obvious that they can; extent is a trickier issue. Regardless, I think premise #1 is on some solid footing. If any one seeks to differ, I'm all ears.

So how difficult is it to determine which companies are good and which are bad? Some people have suggested that it is impossibly hard. I would argue that's false. Their is no lack of investment funds that one can access which do exactly this. There are Christian funds with invest in a 'Christian friendly way'. There are ethical funds which do exactly what Gates suggests is too hard and only invest in an ethical way! Heck, there are even 'vice funds' which focus exclusively on investing in those areas that others maybe don't want to, like Tobacco.

But how can we tell if the final product of a companies activities are positive or negative? What if we don't agree on what's even a good practice? Well that is certainly tricky but not impossible to deal with. Most companies that are doing 'evil' can be ruled out without too much trouble. Companies that fall at this extreme end are guilty of excessive pollution, labour/human rights abuses, or dealing with those we hold as intolerable (eg. terrorist organizations). But what about those companies that can't be pegged so easily, like a company seeking to privatize water or operate a nuclear plant? In cases like this it is incumbent on Gates to make a principled stand, one way or the other, based on a solid rational of what he believes is best overall. With the stated goals of this charity, the most hypocritical thing that Gates could do is to ignore this issue.

But does it matter? How can investment make a difference anyway, won't someone else step up and invest? Maybe, but that doesn't mean it can't have an effect. By shrinking the pool of willing investment you're giving the remaining investment more value to the company thereby making it more expensive to that company. I offer 'vice finds' as an example; They invest exclusively in those areas that others find distasteful (like tobacco or gambling) and expect a premium in return. Anytime you put financial pressure on a company, it's pressure to change the way it operates. On the other side of the coin, you are then investing in companies that are making an effort. This increases their competitiveness by comparison.

I'm flabbergasted that Gates is actively ignoring this aspect. This could be the single greatest contribution he makes to the world. Instead he wants to focus solely on the symptoms (illiteracy, disease) when the initial causes are largely ignored. For the record I see the issue this way:

1. Companies operations can have an impact on the well being of the areas they operate in.

2. Companies require investment/capital to operate.

Therefore, we can impact a companies ability to operate - and by extension, conditions in the areas they operate - by selectively investing our money towards good corporate practice and away from bad.

Re:Bill Gates

[Coeurderoy]

No he is not.
Microsoft is a bad corporation, and this has much to do with the caracter of M. Gates, who probably is not very good at empathy, and quite efficient at greed.
But there are many obviously "worse" people than M. Gates.

So writing that he is the "worst" brands you as a loony.
And by association might give a bad image of other M$ opponents

"tout ce qui est excessif est dérisoire" (no I'm german :-))