Finance in Ethical Social Change
Principles for Responsible Management Education (PRME) started in 2007 and gave six principles in finance that can help with positive societal change (Six Principles, 2007). These six principles were developed in conjunction with the United Nations Global Compact. They include: Purpose, Values, Method, Research, Partnership, and Dialogue. The group was initially formed by the top leaders in financial education.
The first step in this global change is education. Without today’s and tomorrow’s students being properly trained in how to use finance for this endeavor, the sought change will not occur. Aflatoun International did a study on how to make societal changes through education (Kaat & Sulava, 2015). They made these points:
- Global Evidence – The trials for the program was instituted in six nations. It entailed Personal Understanding and Exploration, Rights and Responsibilities, Savings and Spending, Planning and Budgeting, and Social and Financial Enterprise. The program is geared for youth as young as 3 to 6 years of age.
- Social Outcomes – The program has empowered the next generation to take actions within themselves on a personal and social level. In 60% of the students, there was an increase in self-confidence and self-efficacy. The study also found that those engaged in the program were less likely to be engaged in child labor. The students improved their understanding, were able to control emotions, and promote/maintain mutual and positive relationships.
Many see finance and investment as an enemy to real social change and progress (Harries, 2015). Despite unease in the social change community, there is a place for social investment. Besides the capital investments made, those investing have a wealth of knowledge to impart. They understand the policy process and have worked with decision makers. This is an open doorway that social change leaders should work with.
There are many cases of where finance has aided in social change throughout the world (Trahant, 2016). In 2012, the Forum for Sustainable and Responsible Investment showed #3.31 Trillion dollars in US assets were handled by 443 investors and 272 market managers. There were also 1,043 community investment institutions that used the Environmental, Social, and Governance criteria (ESG) in their investment portfolios. By 2015, sustainable investment funds exceed the median returns of the traditional equity funds. Since 1990, the MSCI KLD 4000 Social Index fund outperformed the Standard and Poor 500.
Millennials that invest are growing and investing more. Ninety percent have stated they would change brands from their mom and dad era favorites to those that had a social cause attached. These investments aid people like:
With the proper education in finance and the training in social equity and equality, the financial sector can make huge impacts in leveling the playing fields the world over. Louisville, Kentucky is a city that has seen the mix of community change and finance (Fischer, 2018). The administration recognized that every person mattered and was connected. The mayor stated that all health (mental, physical, environmental, and financial) is imperative for social change. He also said that continual learning is needed for society to succeed. The mayor started his 2nd term in 2015. He was awarded with the 2013 Public Official of the Year by Governing Magazine. He has been the only US mayor to earn the award.The Dali Lama said, “It is not enough to be compassionate. You must act.” (15 Inspirational Quotes for a Social Worker, 2018). To act a person, group, or government must be willing to invest in the future. This means finance for change. The heart may be willing, but without any financial support for social programs, the programs are doomed to failure.
Fischer, G. (2018). Louisville’s “Culture of Compassion”: A Model for Community-based Financial Empowerment. What It’s Worth. Retrieved from http://www.strongfinancialfuture.org/essays/model-for-community-based-financial-empowerment/
Harries, R. (2015). Supporting Social Change: The Role Of Social Investment (December Report). Retrieved from Collaborate CIC : https://www.scrt.scot/wp-content/uploads/2015/12/Supporting-Social-Change-_-The-Role-of-Social-Investment-Dec-15.pdf
Kaat, A. & Sulava, K. (2016). Inspiring Change in Children and Youth through Social and Financial Education Globally. Together with Roma, We will Achieve More, p 44-52. Retrieved from https://www.aflatoun.org/wp-content/uploads/2016/10/Inspiring-Change-in-Children-and-Youth-through-Social-and-Financial-Education-Globally-EN.pdf
Six Principles. (2007). PRME. Retrieved from http://www.unprme.org/about-prme/the-six-principles.php Trahant, G. (2016). 24 Financial Ventures Changing the World Through Social Impact Investing. Cause. Retrieved from http://www.causeartist.com/changing-the-world-through-social-impact-investing/