A well-known asset management firm in Boston has written to Mayor Thomas Menino advising him not to let Wal-Mart into his city. Menino has been an outspoken opponent of a Wal-Mart store in Boston.
Zevin Asset Management which manages money for institutions, foundations, and other organizations looking for “socially responsible” investments, focuses on well-managed companies with sustainable business practices. That does not include Wal-Mart.
In a letter to Mayor Menino, dated December 7, 2011, Sonia Kowal, Director of Socially Responsible Investing for Zevin, says that Wal-Mart has a “poor record of corporate citizenship.” Here is Kowal’s letter:
“Dear Mayor Menino,
I write to express my firm’s concern over the potential entrance of Wal-Mart into Roxbury. Zevin Asset Management, LLC is a Boston based investment firm which integrates financial and environmental, social, and governance research in making investment decisions on behalf of our clients. We have never held Wal-Mart stock in client portfolios as we think that better investments can be made among its more sustainable peers in the retail sector.
While Wal-Mart has made some very impressive moves towards waste reduction, truck fleet efficiency, and a sustainability index for its suppliers, we believe that this is more than offset by the negative impact on local communities and the company’s poor track record on worker’s rights issues.
While we are sympathetic about the need for job creation and low prices for consumers, we believe that Wal-Mart’s presence in a community does not achieve those goals over the long-term. There have been many studies that have shown that when Wal-Mart enters a market, the net effect is to reduce local employment, reduce area wage rates and total payroll, and eliminate other businesses (especially small locally-owned shops) and raise poverty rates. Is this something that Roxbury wants to pursue?
As I’m sure you are aware, Wal-Mart has been implicated in a significant number of employee-related lawsuits, many of which have received class action status. The lawsuits have alleged violations of wage and hour laws, failure to pay overtime wages, forcing employees to work off the clock, discrimination, and illegal compensation. We believe that the severity and frequency of the incidents are of great concern. Moreover, Wal-Mart continues to adopt contentious tactics to systematically prevent its employees from unionizing, including intimidation of union supporters and store closures where unionization efforts have succeeded. Such methods contravene US labor law as well as two core International Labor Organization (ILO) Human Rights conventions, namely the right to freedom of association and collective bargaining.
Our continued exclusion of Wal-Mart from our clients’ portfolios is a result of the Company’s poor record of corporate citizenship described above. Our investment process considers these types of factors when making decisions as we believe that over time, a company’s respect for its workers, suppliers, customers, community, and investors, as well as the natural environment contributes to a strong and enduring firm. Based on the Company’s disappointing behavior in other communities, we are concerned that allowing a Wal-Mart in Roxbury would turn out to be a long-term negative for the residents of Boston.”
The University of California, Irvine study quoted above showed that Wal-Mart store openings reduce retail employment by 2.7%, implying that each Wal-Mart employee replaces about 1.4 employees in the rest of the retail sector.
The 2007 University of California, Berkeley studies found “strong evidence that Wal-Mart entry reduced average and total retail earnings, retail wages, and health benefits for retail workers primarily in urban areas”.
The 2009 Loyola University study found that the probability of retailers going out of business in the two years after the Wal-Mart opened was significantly higher for establishments close to the studied Wal-Mart location in Chicago. This resulted in an elimination of estimated 300 jobs, roughly equaling the numbers in the new Wal-Mart.
Sonia Kowal also sent the same letter to Somerville, Massachusetts Mayor Joseph Curtatone, and Watertown, Massachusetts Town Manager Michael Driscoll. These two communities are also engaged in controversial Wal-Mart battles.
Readers seeking more background on Zevin Asset Management should visit their website at: http://www.zevin.com/index.php, or email them at [email protected].
A well-known asset management firm in Boston has written to Mayor Thomas Menino advising him not to let Wal-Mart into his city. Menino has been an outspoken opponent of a Wal-Mart store in Boston.
