A Review of Israel Ministry of Finance SRI Position Paper

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Last week, I received an email from the Israeli Ministry of Finance of great significance. The email announced the publishing of a policy paper by a division within the Ministry to consider the implications of Socially Responsible Investing. This email quietly has the potential to change the way Israeli society views the capital markets. Currently the capital markets are viewed by Israelis as the unbridled ability to maximize profits with little concern for society’s well being or ethical standards. Little debate has taken place on this topic and sadly many efforts to raise the topic has resulted in the hijacking of the debate by corporate interests rather than an open balanced debate by all sectors of the Israeli public. I propose that people who have any concern for the well being of Israeli society ought to turn their attention to SRI as a tool for moderating values in Israeli society. As this paper proposes, having legislation enacted that allow ethical and moral considerations to be considered by a fund manager is the foundation on which our society’s economy shall reflect our desire for a just and good society. Without this legislative foundation we are very close to economic anarchy.

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Competitive Advantage Through CSR

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It’s not often you get mainstream business thought leaders talking about CSR in detail. Michael Porter, world renowned business competitive advantage expert writes a detailed paper on the “The Link Between Competitive Advantage and Corporate Social Responsibility“

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Shareholder Rights in Israel

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I have been searching for the most effective way to establish SRI in Israel for many years. Unfortunately there are many barriers to SRI in Israel. Probably the most significant is the lack of an awareness of Shareholder rights. Israelis are used to thinking about the stock market more as a casino and less as an economic system for allowing small investors to become capital owners. One topic which may change all that is the divest from Iran campaign Bibi Netanyahu is heading up. I congratulate him for stepping up to the plate on this issue and hope that the media will be kind enough to provide him with a podium from which to communicate with the Israeli public. The previous post is an excellent article describing Netanyahu’s campaign.

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Divest from Iran

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Laura Goldman ’s March 20th article in Globes on Netanyahu’s campaign to get America’s largest pension plans to divest from companies operating in Iran provides a great analysis of one of the most important issues in SRI to date. The article may be read at www.globes.co.il Following is the opening paragraph “
“Since there have already been 3,468 military deaths and countless civilian fatalities in Iraq, shouldn’t we search for non-military solutions before we go to war with Iran?
Former Prime Minister Netanyahu has recently been barnstorming the United States to call on the fiduciaries of America’s largest pension plans. Netanyahu is asking the state and city treasurers to stop investing in companies that do business with Iran.”

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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The Commodification of Corporate Social Responsibility: An Israeli Test Case

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Following an innocent typing of the words “CSR in Israel” into google I came across this paper describing the local Israeli Corporate Social Responsibility “industry” with vivid clarity. The paper, written by Ronen Shamir of the Department of Sociology, Tel Aviv University. Ronen describes his personal experience while studying a non government organization setup to advance CSR in Israel. For anyone interested in CSR in Israel I highly recommend reading this paper as it provides a unique insight into CSR in Israel.

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The Path Toward Sustainable Development in Israel 2006

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I’ve considered for quite a while to start a blog however I never got around to the writing stage. One of my excuses was that I didn’t know what to write about since there are so many aspects of Kayema’s activities that its difficult to focus on one specific element.

Nevertheless, I’ve decided to jump into the cold water and start writing. So here goes.

Since Kayema was founded on the basis for Sustainable Investment Research, I will focus on this topic at least for now. My colleagues Saul Kramer and Jason Meister will focus more on Cleantech in Israel and abroad and the global infrastructure industry. Both topics are at the heart of our activities here at Kayema.

I would like to review the latest report by Israel’s Ministry of Environment on the country’s progress towards Sustainable Development.

This document is quite informative and I believe provides an accurate picture of where Israeli is holding vis a vis the national goal of sustainable development. Having said that I am afraid to say we are not in a good position.

Most of the initiatives mentioned in this report are tactical in nature. Take for example the summary of initiatives taken by the Ministry of Finance which lists five initiatives 1. Environmental reporting guidelines by the Israel Securities Authority for public companies; 2. Public tender for marketing brownfields for remediation and redevelopment of run down urban areas; 3. “Green” building principles and sustainable planning in government tenders; 4. Tax incentives for hybrid cars, 5. Higher taxes for diesel fuel. These initiatives, while very welcome do not focus on the core of the Ministry of Finance’s activities i.e. the country’s budget allocation strategy nor does is discuss its role as the regulator of the financial markets which is the Ministry’s second most important task.

Unfortunately we see this picture of dealing with issues on a tactical level rather than on a strategic level throughout the report.

I hope to write about my recommendations on refocusing our national efforts onto a more strategic path on future posts.

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