Like other cities, Portland has struggled with the question of how to handle taxpayer investments in companies whose business practices are distasteful or objectionable. Those who handle the city’s investment portfolio walk a fine line between getting the best return for taxpayers and being socially responsible. For years, a large and vocal faction here in Portland has opposed Walmart’s desire to build their big box stores throughout the city. How can the city balance the progressive values that prevail in Portland with the truth that Walmart is a corporate behemoth that exploits everything it touches? Especially when it turns out that Walmart is actually a pretty good investment? How can a company with such a miserable track record of underpaying and mistreating employees be allowed to do business in a city which values tolerance and fair play? And are we willing to accept that factoring social values into an investment strategy almost certainly means lower returns on those investments?
Several months ago, Portland’s City Council adopted a socially responsible investing protocol. The intent of the protocol is to use the ideals that Portland stands for to drive the city’s investment strategy. Because of the protocol, Portland will be divesting any investments in Walmart by 2016. It’s easy to applaud the decision to divest, but will it be an effective strategy…or merely symbolic? Whether the message sent by divestment will be received by Walmart is difficult to know, but I suspect the company faces far bigger issues than where a liberal mecca in the Pacific Northwest invests their taxpayers’ money. The decision to divest is seen as a victory for those who despise Walmart, but it’s arguably a lot of sound and fury ultimately signifying nothing. Will it force Walmart to change? Will it force the company to acknowledge its reputation for exploitation? Seems unlikely, no?
The big problem with Portland divesting from Walmart is that the corporate behemoth from Bentonville, Arkansas, is hardly the only poor corporate citizen. While the city is publicly rebuking Walmart, it recently welcomed a three-story Target store that opened in the previously vacant Galleria in downtown Portland. Target’s treatment of its front-line employees is only marginally better than Walmart, and the pay is almost as bad. If Portland wants to be seen as making a difference and standing up for the workers of big box retailers, they have some catching up to do. Exercising socially responsible investing means more than divesting from a multinational behemoth seen by many as Public Enemy #1. If you’re going to stand for something, which is the intent behind the Portland’s socially responsible investing protocol, it’s essential to be consistent…and that’s the biggest challenge facing the Rose City. How do you take a stand against Walmart without doing the same with Target? Or Kmart? Or any number of other large retailers who exploit their employees and pay them minimum wage? How do you consistently stand for fair treatment of workers and fair play without losing investments that may have proven historically fruitful?
Portland’s intentions, while well-founded, have yet to really be put to the test, but initial impressions have been mixed. Rejecting Walmart as a corporate bully while welcoming Target with open arms sends a confusing message at best and is barely concealed hypocrisy at worst. Does Portland have a solid strategy in place to deal with truly difficult socially responsible investment questions, or is it just making things up as it goes?
The problem with doing the right thing is that it’s never as simple or uncomplicated as it looks.
