Jack Sheinkman
President
The Amalgamated Bank of New York
New York, New York

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"Sustainable Development." That concept, which refers to business activities that ensure the economic viability of a company while concurrently promoting the well-being of people and the environment, provided the underpinning for the foundation of Amalgamated Bank of New York by the Amalgamated Clothing Workers of America in 1923.

Conceived by organized labor in an era when banks were typically established by and catered almost exclusively to businesses and wealthy individuals, Amalgamated Bank's mission was to offer financial services to individuals of an evergrowing majority class in New York City – the working class.

The Bank was first in the industry, for example, to introduce the unsecured installment loan to workers, for example, credit based on proof of a steady job rather than the tangible collateral typically required, and did so at the lowest interest rates, and it instituted a foreign funds transfer system to help immigrants send money to their families in Europe. The Bank also contributed funding for the construction of affordable housing to accommodate the expanding work force and later introduced free checking and savings accounts, again for the benefit of the average wage earner.

In short, an institution established in a city prospering on the backs of the working class, the Bank pursued maverick strategies that concurrently profited the Bank while lending critical financial support to workers.

Over the course of seven decades since the early years of the Bank, social progression, the labor movement, competition in the marketplace and a lot of legislation have ameliorated many of the tough conditions workers endured in the United States. The quality of life of the average American has markedly improved and far exceeds the standard of living in most countries (of course, it lags behind some as well).

Yet the continuance, or better, the enhancement of our present status is not guaranteed. In addition to the domestic challenges we face such as accessibility to quality education, jobs, health and elder care, and affordable housing; the elimination of racism, sexism, and the polluting of our environment; and not least, the pursuit of safe, quality work environments, we must also confront challenges emanating from a global level. Our industrialization has fostered this country's growing interdependence on widely diverse nations for the conduct of trade, the preservation of natural resources, curbing of population growth, resolution of ethnic, religious and territorial conflicts, prevention and containment of diseases, and for addressing the impact of mass migrations brought on by drought and warfare.

Our progress therefore depends on us working harder at home, particularly in our cities, to meet both domestic and, frequently unpredictable, global challenges that affect our quality of life. Amalgamated Bank, which remains the only labor-owned commercial bank in the United States, developed and implemented in 1992 an idea for a unique equity fund that would not only economically benefit the Bank and its clients, but also the shareholders, employees and stakeholders of large U.S. corporations by encouraging the corporations to pursue sound corporate governance policies and to address issues of social concern that can affect corporate profitability.

With its initial objective to provide negotiated union retirement funds with a 'low-risk' equity investment vehicle, the Bank launched the LongView Collective Investment Fund, an index fund that presently has over 30 members, more than $1 billion in assets and invests in all stocks of the Standard & Poor 500. With its subsequent objective being the enhancement of long-term shareholder value, the Fund chose vigorous shareholder activism as the cornerstone of its existence, a feature that continues to render the Fund unique amongst its ilk.

By closely monitoring the performance of its 500 companies, the LongView Fund detects poor performers, identifies corporate governance policies and issues of social concern that if addressed, would likely increase long-term profitability, and submits shareholder proposals, letters of concern, and meets with corporate executives to pursue the Fund's objectives. Corporate policies and practices can have far reaching consequences. With most larger U.S. corporations operating on a global scale and generating annual profits well in excess of the gross domestic product of some countries, they not only have enormous power that affects shareholder interests; they also influence the quality of life of people the world-over. As a shareholder, the LongView Fund attempts to influence corporations to pursue corporate governance modifications that not only target their boards of directors and members of management, but that also have a positive affect on their employees, stakeholders, and the environment. The Fund believes that these actions will in turn ultimately increase long-term shareholder value.

For example, having determined through its research that there is a solid connection between the existence of a "high-performance workplace" and increased profits, the Fund was the first shareholder to address the issue by submitting shareholder resolutions to its underperforming companies. The concept of a high-performance workplace has been endorsed by the U.S. Department of Labor and, in short, refers to a workplace that is designed to provide workers with the information, skills, incentives, and responsibility to make decisions essential for innovation, quality improvement and rapid response to changes in the marketplace. What's good for the worker is good for the company.

Because the Fund further maintains that a corporation which is responsive to social concerns will be more profitable over the long-term, the Fund was the first index fund to demand demonstrable assurances from companies that no business is transacted with foreign manufacturers which utilize forced, convict or illegal child labor, or that otherwise exploit workers.

As a shareholder, the Fund is concerned that over the long-term, the displacement of U.S. workers – who are also consumers – in favor of forced laborers could have a negative impact on the U.S. economy and the Fund's investments. It is additionally concerned over the prospect of a consumer backlash against companies who may be targeted by the media as utilizing forced labor. By protecting its shareholder interests, the Fund also aims to help curtail this wretched practice. In addition, the Fund has received record shareholder support for many of its shareholder proposals seeking modifications in corporate governance policies, such as the declassification of corporate boards and the rescission of other antitakeover devices, and the institution of confidential voting at shareholder meetings.

Unlike other funds that have a history of voting by default with management, the Fund actively votes its proxy ballots, an action which also advances its pursuit of social responsiveness and better corporate governance. Proxy issues range from executive compensation, to support for the implementation of anti-discriminatory practices in Northern Ireland and the adoption of adequate environmental protection policies and practices.

The level of shareholder activism achieved by the Fund exceeds general practice, yet derives from the Fund's belief that activism can result in better skilled employees who can increase corporate profits, as well as their own; from the knowledge that illegal, unethical trade practices by foreign companies reduce the profits of U.S. companies – and simultaneously destroy lives; from the understanding that protecting the environment today is not only cost-effective over the long-term, but critical to the survival of the planet; and from the knowledge that without activism, boards of directors and managements of companies have the potential to indulge individual self-interests at the expense of shareholders, the employees and stakeholders, all of whom have a significant multilateral impact on the economy of the U.S. and on the lives of innumerable individuals.

Through the activities of its LongView Collective Investment Fund, Amalgamated Bank is helping to promote sustainable development in numerous communities by helping to influence the corporate policies and practices that affect them. Commercial profitability and sustainable development readily go hand in hand if such objective is kept in the forefront of the collective corporate mind. And certainly, the more that individuals donate their time and expertise to development projects, the more they will influence corporations to adopt a development-oriented mentality.

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