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Commissioner Steve Novick

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Council extends Do-Not-Buy List, maintaining policy of no new investments in Wal-Mart

Today, Council unanimously adopted two resolutions (Agenda Items #1300 and #1301) to ensure the City puts our money where our mouth is by aligning our investment decisions about corporate bonds with Portland values. 

I was surprised to learn last year that the City did not include any social or values criteria for our investment decisions. I was even more surprised to learn that the City had invested in Wal-Mart, a company that has a well-documented and troubling history of abusive labor practices, corporate corruption, and exercise of market power so as to disrupt normal competitive market forces. As a public entity, we have a responsibility not to loan taxpayer dollars to those companies that seriously violate these and the other core principles.

Two resolutions in October 2013 for the first time established social and values criteria for the City's investments. Today, we extended that commitment.

The first resolution Council adopted today renews our current Do-Not-Buy List, ensuring the City will not purchase any new Wal-Mart bonds through December 2015. Wal-Mart belongs on this list because:

  • For example, in the area of labor practices, Wal-Mart continues to resist campaigns to provide Wal-Mart employees better wages, benefits, and other protections.
  • Just this month, an administrative law judge for the National Labor Relations Board ruled that Wal-Mart managers in California had illegally disciplined workers for going on strike and threatened to close a store if many of its employees joined the advocacy group OUR Wal-Mart.
  • In the area of corporate ethics and governance, the New York Times published the results of an investigation into a Wal-Mart de Mexico scheme to bribe local government officials in Mexico in exchange for fast-tracking development permits.
  • Wal-Mart also uses its market dominance to disrupt normal market forces, as detailed in the book The Wal-Mart Effect by Charles Fishman
  • Council also passed a resolution today establishing a permanent standing Socially Responsible Investments Committee. This new committee of volunteers is charged with reviewing the City's investments and the principles established by Council and recommending which companies we should add to - or remove from - the Do-Not-Buy List.

The resolution also directs the City to purchase a subscription for company-specific research reports specifically designed to support investor decisions about social- and values-based investment. These reports often include composite scoring that weighs the relative importance of individual issues and criteria. The samples I have seen are impressively thorough.

The committee's work will not be easy. The members, who will be appointed by the City Council, will need to use their best judgment to draw on the research and make recommendations about which companies should go on the Do-Not-Buy List. They must take a balanced approach, considering a company's practices as a whole rather than a single incident or issue.

There isn't a perfect Do-Not-Buy List for the City of Portland. Reasonable people may disagree about which companies should land on the list. This is, however, a community conversation that we should be having, and that is what the permanent committee process allows us to do. I know that my colleagues and I will appoint committee members who are up to the task, and I look forward to our next steps.

Commissioner Steve Novick