A Review of Israel Ministry of Finance SRI Position Paper

February 10th, 2008 | Categories: News · SRI · Israel | Tags: , , , ,

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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Comments

3 Comments so far

  1. Ron Robins on February 11, 2008 12:32 pm

    Daniel — good to hear of the Ministry’s intent concerning SRI. I’m not sure SRI should be mandated by any government though.

    What I feel should be mandated is standardized compulsory reporting of environmental, social and governance (ESG) ativities, and that such reports should be independently audited, with an audit report, and which then is available to all stakeholders.

    In this way, ESG/SRI reporting would be much like the standardization, reporting and auditing of financial statements. This will help to create confidence in what companies are reporting and investors need not feel that all companies are doing is simply ‘greenwashing!’

    Best wishes, hope you can contact me again sometime. Ron Robins (Toronto)

  2. Daniel Schwab on February 12, 2008 3:29 am

    Hi Ron, Glad to hear from you. The paper nor I are proposing to enact specific SRI standards as law. Rather I am proposing making it legal for fund managers to take into consideration SRI principles should they choose to do so. The current interpretation of the law is that fund managers may not consider ethical, environmental or any other “non financial” considerations. The only interest they may have is to maximize profits for fund owners i.e. excluding SRI or ESG principles. Does this clarify my point? Best regards, Daniel

  3. Ron Robins on February 12, 2008 7:57 pm

    Thanks for the clarification. I definitely agree that the ministry should make laws or regulations that allow fund managers to include ESG/SRI factors in their investment analysis!

    Hey, what’s the latest on the Kayema Sustainability Index?

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