Emerging Markets: Harnessing the Power of Social Activism
In many emerging markets, economic development often is held back by a government where the officials enrich themselves rather than help their citizens. Investors’ power can bring change in such emerging markets — changes that can counteract moves that prevent economic development.
One of the simplest tools of social activism is a boycott, in which you refuse to buy certain types of products that may be financing bad behavior: diamonds used to finance unnecessary wars; clothing made under sweatshop conditions; oil extracted without any regard for the environment. If these boycotts are well-organized so that they catch on with people, they can be effective in using market power to bring change.
Another trick up an investor’s sleeve is the use of shareholder resolutions and proxy voting to help convince multinational corporations to act responsibly no matter where they operate. These resolutions have been used to address environmental and working conditions in places where the laws are lax. Basic instructions for filing a shareholder resolution can be found on the AFL-CIO Web site.