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the bigger picture

Returning to the roots of commerce

The rise in socially responsible funds and the concept of allowing investors choices consistent with their ethical and religious beliefs are nothing new. But is it possible to combine successful business practices with, say, looking after the disadvantaged?

The first funds to allow investors to direct their money into companies whose activities they approved of were pioneered by the life assurance group Friends Provident in the 1980s, through a series of Stewardship Funds. This pioneering move was typical of the Quakers, some of whom were the founders of the life assurance company. Their origins go back to The Religious Society of Friends, a Christian movement founded in England in the 17th Century by George Fox.

Puritan and non-conformist, they were given the name Quakers as a term of derision, because they would often quake in the presence of God. But they gained a reputation for social activism, and were instrumental in such historic events as the abolition of the slave trade of the 18th and 19th centuries, prison reform and the granting of voting rights to women. Many paid a high price, as they were tortured and imprisoned for their faith and beliefs.

Their expertise and success in business grew over the years but, coupled with their beliefs, it made them more enemies than friends. Unable to gain insurance, necessity became their mother of invention and they formed their own company, Friends Provident, now a leading UK assurance society. Not surprisingly, one of the overriding concerns of the society was to care for the poor and disadvantaged in their own communities.

Many captains of commerce and industry in the 1800s, on both sides of the Atlantic, were Quakers who founded and managed their businesses on biblical principles. Joseph Fry, who started the famous Fry’s chocolates, built a small town for the employees of his factories, with all amenities, schools, hospitals, recreation facilities and a church. Work was scarce and many had to leave their hometowns to find jobs. Eventually, Fry’s was bought by the Cadbury Company, John Cadbury being a Quaker himself. In the same Quaker spirit, Edward Pease, owner and pioneer of the first railway in England from Stockton to Darlington, furnished housing to his own employees; and Joseph Rowntree, founder of the famous Rowntree Chocolates, was the first person to develop low-cost social housing for the poor.

Barclays Bank also had its roots in the Quaker movement. Barclays traces its origin back to 1690 when John Freame, a Quaker, and Thomas Gould started trading as Goldsmith Bankers in Lombard Street in London. The name of the bank was changed to Barclays in 1736, when James Barclay, the son-in-law of John Freame, one of the founders, became partner in the business. True to their faith and beliefs, the bank’s employees were well housed and looked after.

In spite of being persecuted for their beliefs, through their success in business, Quakers were able to alleviate much poverty by serving the wider community. They saw business as a way of allowing them to make positive changes to society. They didn’t wait for governments to bankrupt their future generations with unfunded debt liabilities, instead they used what they had wisely, and gave something back. What these pioneers of old understood is, very simple yet profound, that charity begins at home.

The comments and observations by the author are a reflection of his opinion and do not constitute an offer to buy and hold securities, nor does he receive any remuneration from names referred to.