Across My Desk
There's nothing like a good cup of coffee to start the day. But while this steamy brew may add a jolt to life, one socially responsible mutual fund is giving it the heave-ho.
Read on to find out why:
Pax World Funds, home to the United States' first socially and environmentally responsible mutual fund, announced today that it had no choice but to divest itself of 375,000 shares of Starbucks Coffee Company (NASDAQ: SBUX) worth an estimated $23.4 million (1) as a result of the giant coffee chain's decision to enter into a development and distribution deal with whiskey maker Jim Beam to sell a coffee-based alcoholic beverage.
In a February 17, 2005 letter to Starbucks Coffee Company CEO Orin Smith, Pax World Funds and other parties urged the company to reconsider the decision to attach its name to a liqueur. The letter from socially responsible investors applauds the company's strong track record on the environment, sustainable business practices, efforts to promote Fair Trade coffee, commitment to its employees and charitable giving. But the letter also notes: "We are deeply concerned, however, by the company's decision to partner with Jim Beam Brands to produce coffee liqueur."
Pax World Funds Vice President of Social Research Anita Green said: "While we continue to admire and respect many aspects of Starbucks' business and corporate citizenship activities, the company essentially forced our hand in this matter. We have divested ourselves of these shares reluctantly and only after trying to get the company to reconsider its course of action. In the absence of a reversal by Starbucks, our course of action was clear: Investors in Pax World Funds expect us to do what we say we will do about avoiding companies that produce liquor."
The Pax World Funds family - including Pax World Balanced Fund, the Pax World Growth Fund and Pax World High Yield Fund - strives to enable persons of conscience to invest in keeping with their ethical values and to challenge corporations to establish and meet certain ethical standards. The Funds seek to invest in companies that produce goods and services that improve the quality of life such as health care, technology, housing, food, education, pollution control, utilities, and leisure-time activities and that are not engaged in the manufacture of defense or weapons-related products or that derive revenue from the manufacture of tobacco, liquor, or gambling products.
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