Di­vest­ment isn’t only ap­proach to ad­vance pub­lic health mis­sion

Modern Healthcare - - COMMENT -

The Aug. 4 cover story (“Health sys­tems urged to di­vest fos­sil-fuel stocks as UK doc­tors act,” p. 8) high­lights a vi­tal is­sue for so­cially con­scious or­ga­ni­za­tions. How­ever, the ar­ti­cle seems to im­ply that di­vest­ment is the only cred­i­ble way an or­ga­ni­za­tion can align its in­vest­ment prac­tices with its mis­sion of im­prov­ing the com­mu­nity’s health. The al­ter­na­tive strat­egy of share­holder en­gage­ment, al­luded to briefly, is never clearly ex­plained.

Di­vest­ing from fos­sil fuel com­pa­nies is a one-and-done ap­proach. It makes a pub­lic state­ment and seems to leave the in­vest­ing or­ga­ni­za­tion with clean hands. But it leaves no ba­sis for fur­ther in­flu­ence on a com­pany’s prac­tices. Con­tin­ued in­vest­ment per­mits share­holder en­gage­ment, in con­cert with other in­vestors and ad­vo­cacy groups, to ex­ert on­go­ing lever­age on the com­pany and its con­duct. This ap­proach may be less “pure,” but or­ga­ni­za­tions com­mit­ted to share­holder di­a­logue and high-pro­file proxy res­o­lu­tions may have more im­pact on a com­pany’s prac­tice than or­ga­ni­za­tions that di­vest. At most, the jury is still out on which strat­egy is to be pre­ferred. Of course, an or­ga­ni­za­tion that claims an en­gage­ment strat­egy must gen­uinely pur­sue it, not cyn­i­cally use “en­gage­ment” as a cover for in­vest­ment as usual.

David McCurdy Elmhurst, Ill.

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