Alice Tepper Marlin

Put Your Money Where Your Heart Is

Recorded: November 8, 2012

Alice Tepper Marlin wanted to make a difference as a securities analyst, but how? She figured it out in a big way! Watch this interview with Alice to hear how she was able to promote social and environmental justice through her financial work. Alice provides us with a tool to create positive social change through the way we spend our money.

Ms. Tepper Marlin serves as President and CEO of Social Accountability International (SAI), a standard-setting organization for improving workplaces and communities head-quartered in New York City. She founded SAI in 1997. SAI provides substantial capacity building services for its SA8000 standard, which is designed by a multi-stakeholder Advisory Board to assure decent workplaces and excellent human resource management worldwide. SA8000 is based on United Nations and ILO Conventions and Declarations, and on the ISO management systems. SAI contracts with Social Accountability Accreditation Services (SAAS) to license qualified organizations to verify compliance with the SA8000 standard.

Alice earned her B.A. in Economics from Wellesley College and also studied at the NYU Graduate School of Business Administration. She started her career as a Securities Analyst and Labor Economist at Burnham and Company, and as the editor of an international tax journal at the International Bureau of Fiscal Documentation in the Netherlands. She designed and managed the first social investment portfolio management services in 1968. She founded the Council on Economic Priorities in 1969, and served as President and CEO for 33 years. CEP pioneered the social investment field and regularly published the best selling consumer guide, “Shopping for a Better World.”

Ms. Tepper Marlin has been a frequent public speaker on corporate accountability for three decades. She is also Citi Distinguished Fellow in Ethics and Leadership at NYU’s Stern School of Business where she also serves as an Adjunct Professor in the Markets, Ethics & Law program. Additionally, Alice is a Faculty Member at Wellesley College’s Madeline Albright Institute for Global Affairs.

Alice Tepper Marlin:    After college I got a job working as a securities analyst and portfolio manager for a big Wall Street firm.  It was exciting and fun because I was a pioneer.  Freshman/sophomore year in college, Betty Friedan’s, Feminine Mystique, came out, we all stayed up all night, talked about it, debated it and at the time, there were only five other women who had been securities analysts on Wall Street.  So it wasn’t just making some money on Wall Street, it was being one of the first women to have the job and it was fun, I really enjoyed it but I never went there for that reason.  I went there because I got interested sophomore year in college in a sociology course about how to break the cycle of poverty.  What I really wanted to do was use the leverage of the business community to create social change.

You know, I noticed that when I went to talk to corporate executives as a securities analyst, they really listened.  They really wanted to do whatever it is I wanted to ask them about, so I thought well, if investors were asking social and environmental questions when they decided where to make – where to put their investment capital, that would make a really big difference.  You would get leverage, a small change in a very large company would affect a lot of people, would affect the environment.  And so I set up a socially responsible fund. Originally, it was all about the war in Vietnam and how to get us out of that war in Southeast Asia, so it was a peace portfolio.  It got written up in the New York Times, just a little squib like this, we got 700 people calling and writing and we raised some money for it.  And I thought well, if people wanted to invest in companies that were producing for peace rather than producing war material, couldn’t we also get them to invest in companies that observe Civil Rights that promoted minorities and women?  Couldn’t we get them to choose to invest in companies that took environmental stewardship seriously, were doing less production of toxic chemicals?  There was interest in the innovative idea so I was able to convince some foundation funders, Rockefeller Family to put up some money for us to develop methods and do the research to identify the companies that were leaders and the companies that were lagers.  That’s the research that you saw, Huey, years ago.

We did these great big tomes, books this thick that would look at one industry at a time and we started with those.  McGraw Hill identified in 1970 as having the biggest dollar cleanup job to do to meet the new environmental regulations that were just being passed by the congress.  So we looked at the steel industry, at the electric utilities, at the paper and pulp companies and we rated them.  We looked at what – to what degree had they invested in the best possible state of the art pollution control equipment. To what degree were they looking for less harmful ways, less use of natural resources, more environmentally benign ways of production, and we rated them.  We got publicity for it and market forces had some real affect.  So we’d been working on those issues, we worked on those issues for about nearly 30 years, after about 20, we began to figure out how to boil down the research that was great big tomes that had big, pretty big influence because companies always want to be number one.  So if they weren’t doing well on one of our rankings, they began to think about producing things in a different way and wanting to get a better ranking.  We’d go back and redo these studies every three or four years and the newspaper coverage would really focus on the companies that changed, the companies that had moved up in the ranking, the companies that had failed to do it and stayed at the bottom or moved back.  But we weren’t really getting to consumers and we really wanted to get to make this information available to consumers and for that, you had to make it a lot simpler and easier to absorb because you’re competing with advertising, 30 seconds, 60 seconds, what’s on a package when people make a decision which brand of toothpaste to buy.  So we did a book called Shopping For A Better World, it rated companies on 9 different social and environmental factors, all the way from environmental stewardship, promotion of women, promotion of minorities, family friendly benefits to animal welfare.  And companies that were leaders got a check and the companies that did the most poorly got an X and companies became really interested in moving those X’s to checks.  The thing sold a million copies.  I was on every morning TV program, we were written up in virtually every major newspaper and magazine in the country.  It sold those million copies mainly through word of mouth and eventually Valentine Books picked it up and we were on the Best Seller list.

Huey Johnson:    Wow!

Alice Tepper Marlin:    And it had a lot of, a lot of change because this was about casting your economic vote as conscientiously as you cast your political vote.  We cast our political vote once every couple of years, but we cast our economic vote almost every day, every time we buy a product.  If you – if a company thinks that or knows that some rating in this little book is going to make somebody reach for their brand of peas rather than somebody else’s brand of peas on the shelf, that’s worth quite a lot of money to that company, they’re willing to make some significant changes to have just a very small difference in consumer choices.  So to win a political campaign, you have to get half the votes.  To win in the marketplace of consumer brands, if you increase market share by ¼ of 1% for a large consumer brand company, you’ve really got your voice heard and heard all the way up to the top of the company and heard by the investors and that tended to have a pretty big impact.

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