| 1- Script
and Recording
NEW SHARES OFFER FOR ETHICAL FIRM
Adapted from BBC News
Tuesday, 17 September, 2002
Buying shares is meant to be a way of making money grow. Even in these days of falling markets, the principle still holds - invest in shares that you think will rise, in order to get a good return on your cash. So are people going to be clamouring for shares in a company that thinks profits should not be the main reason for investing? The fair trade company Traidcraft reckons they will.
Traidcraft is trying to raise £3.25m ($5m) by offering shares to the public in London and it intends to provide investors with financial returns. But says Traidcraft's chief executive Paul Chandler, the principal return for shareholders will be the knowledge that they are helping poor producers and their communities to fight poverty.
The company, founded more than 20 years ago, is now the UK's biggest fair trade organisation. Its aim is to help producers in less developed countries by giving them a fair price for goods ranging from coffee and chocolates to crafts. These are sold in churches, in supermarkets and through catalogues on the web. Mr Chandler says that Traidcraft is already holding its own in the market and its success is sending out a strong signal.
"There is a growing consumer interest in ethical companies and the big commercial companies are beginning to notice this and to realise that they too should be getting involved in fair trade. "
The growing interest in ethical investing prompted the launch of FTSE 4 Good, an index containing only businesses that met targets on the environment, social responsibility, stakeholder relations and human rights.
The oil and gas services group Abbot has been dropped for failing to meet human rights and stakeholder targets. The building firm Heywood Williams has been dropped for failing to meet stakeholder criteria. And the Swiss watchmaker Swatch has been dropped from the FTSE 4 Good Europe index for the same reason.
Further evidence that people want to use their money to help others has come from the ethical bank Triodos. A poll conducted for Triodos found that almost two-thirds of those questioned thought that savings should benefit society as well as paying interest. But while ethical investing has attracted more attention, there is still a way to go for companies such as Traidcraft. "One of the biggest areas we'd like to make breakthroughs in is in the whole area of textiles and manufacturing of cotton," says Mr Chandler. "We're looking at the whole chain of supply through to textiles that are then used in this country."
By Mary Gahan
BBC Consumer Affairs Correspondent
2- Summary
SUMMARY
Major points:
- -Students were expected to know what shares mean, ie money invested with returns on investment. Here the paradox lies in the fact that a company (Traidcraft) offers ethical shares, that is ethics-oriented investment. The main return is the knowledge that local producers are being fairly paid rather than underpaid for their goods.
- -This company was founded twenty years ago, this seems to have been overlooked by students.
- -They have an online catalogue.
- -The article also mentions the Footsie 4 Good index which was explained in class.
- -Whenever you do not know companies'names, do not invent them. It is more important to mention an ethical bank rather than invent a name which will not be Triodos.
Student's Sample Summary:
This September 17th, 2002 BBC News online article entitled New Shares Offer for Ethical Firms raises the issue of ethical investment. A company called Traidcraft will try to raise £3.25m by selling shares in London in order to prove that investing is not only a question of profits and returns on equity but also a question of social awareness. The 20-year old company has become a major fair trading firm in the UK. Its target is to help Third World producers by guaranteeing that they get a fair deal for their crops and crafts which are distributed in churches, shops and on the net. The point is that investors may continue to search for profits while fighting poverty in developing countries. Consumer interest in ethical firms is also at the root of the Footsie4Good index which lists all the companies that respect the environment, stakeholder relations, and are committed to social responsibility. Oil and gas services Abbot, building firm Heywood Williams and Swiss watchmaker Swatch have been excluded from the index for failing to meet their demanding standards. The survey carried out by ethical bank Triados has confirmed the general public interest in ethical investment. However, fair trading practices still need to be extended to the textile manufacturing sector in the UK.
To be sure, this summary is a little longer than the 150-word limit imposed but you should note that it did not exceed the number of lines provided on the exam paper.
This is quite acceptable and was accepted.
Please, do not waste your time checking the number of words you wrote. Just stick within the 15-line limit. This is a time-saving device.
3- Opinion Question
"Savings should benefit society as well as paying interest." Your essay should include specific and appropriate examples taken from various industrial sectors.
Sample student's opinion question:
The following essay uses class material, defines savings using DAN 221 course contents, defines fair trade and tries to mention limits to ethics-oriented investment. But you will notice that it does not list enough examples, is a compact block to read and does not sound "personal". There is no writer's intervention which is a pity in an opinion question.
Investors' money can be put into stocks. This offers two distinct advantages. First, investors will get a return on investment when shareprices rise and secondly, companies will be provided with ample financial resources. In economic terms, savings are at the source of economic growth. The economy stalls when savings are not invested but they sustain growth when they are. Investing in the housing sector for example will not only increase the supply of houses it will also increase wealth in the long term. However, society at large may also benefit when the money saved is invested in companies that are committed to fair trade. Fair trading means guaranteeing Third World, small-scale producers a fair price for their goods. With a decent income, they will be able to send their children to school, to afford medical care and thus escape the circle of poverty. The slogan "Trade is not Aid" underlines the importance of self-sufficiency for local coffee-growing farmers and social commitment on the part of Western companies. Savings which go into ethical funds or fair trade companies may help promote just this agenda. However, one should not be blind to the marketing strategies which are part and parcel of the fair trade hype. The Footsie 4Good index for example includes what they call "dark green" gas and oil companies which may not be so respectful of the environment. This is extremely tricky when parent companies overlook the fact that their affiliate companies use child labor or subcontract to sweatshops. Now that the criteria for ethics-oriented activities have been defined, it is going to be more difficult to invest without knowing where one's money is going. Investors cannot keep pretending that they did not know. Finally, certain sectors are very vulnerable. Investing in pension funds for retired people is essential but if they fail, then lots of pensioners will end up without any pension when they most need it.
Here is another student's summary. It is linguistically rich, uses class material including past June exams which is exactly what students are expected to do.
Also, it is finely presented in three blocks which separate the introduction from the main part and the concluding lines. It is easier to read and sounds more personal.
Financial trends today favor ethical investment which is undoubtedly a way for savings to benefit society as well as paying interest.
The FTSE4Good index was created in the UK in 2001 and it serves as a guide for investors seeking ethically-oriented, socially responsible companies to invest in. In order to be listed on this industrial average, firms have to match some specific criteria. They ought not to be involved in oppressive regimes, tobacco, nuclear power, chemicals, animal testing, child labor, pornography or paedophilia and arm manufacturing. Respecting the environment and human rights are stringent criteria. Therefore, these companies can be said to benefit society at large but investors often claim or argue that they do not offer a good enough return on their money. However, if I remember well FTSE4Good companies have performed nearly as well as "normal" companies. In 2002, the Stock Exchange had a rough time, ethical companies went down by 30% on average while non-ethical companies went down by 28%. These two figures are very close and one may therefore assert that it is quite possible to make money by investing ethically, provided that one's criteria are not too strict. Indeed, few FTSE4Good companies must match severe entry levels and one should not be surprised to discover that even some tobacco companies or oil multinationals were welcome into the index. British America Tobacco, BAT, for example joined the list. Its behavior has been considered responsible since it sponsors Nottingham University special programs. Whether it is enough to be respectable is another issue.
In a word, the solution may lie in each one of us. To be sure, I have no money to invest, but I will join a company and my choice will include their type of investment. They should define their ethical profile and this will be part of my decision to join them. Of course, I know that things are not clear-cut. It is difficult for a company to know accurately where invested money comes from. Globalisation has complicated matters. But no matter how complicated it may be, it is an added reason why investors and savers should be cautious.
created by: Geneviève Cohen-Cheminet
|
