What Doing Good Really Gets You

''CalPERS may not do as well by doing good'' (Management, June 19) criticizes California State Treasurer Philip Angelides for promoting a radical new investment policy that would help beneficiaries and society at large. A closer look would show that social considerations are already a part of the California Public Employees' Retirement System's investment policies and that Angelides is not veering so far off course.

According to CalPERS' Social Responsibility Criteria: ''The Board expects the managements of the companies whose equity securities are held in the Fund's portfolio to conduct themselves with propriety and with a view toward social considerations.'' CalPERS' board recently took its social commitment even further by adopting the Global Sullivan Principles of Corporate Responsibility. Those objectives include supporting ''...economic, social, and political justice by companies where they do business.''

Contrary to the ''traditional wisdom'' that author Christopher Palmeri espouses, CalPERS can uphold its fiduciary mandate to get the best returns and invest in a manner that is good for society. This is particularly evident with corporate environmental management practices. It is not a coincidence that companies that inflict harm on society and the environment see the poor financial consequences of their actions. Such companies are often faced with costly litigation and regulatory fines, negative publicity, shareholder actions, and a waste of natural and monetary resources.

We encourage Angelides to continue pushing for stronger investment criteria according to high social and environmental standards. Public pension funds that do so will increase their returns while contributing to the quality of life--including the protection of human health and the environment--for their beneficiaries and participants.

Carla Din
Rosa Foundation for Communities & the Environment
Oakland, Calif.

In an attempt to support his assertion that socially responsible investing (SRI) yields below-average results, Palmeri misused Morningstar Inc. performance information. He wrote: ''The average socially responsible mutual fund underperformed the average U.S. stock fund in the past year, five years, and in the year-to-date.'' The most obvious flaw in his analysis is his comparison of all SRI funds--equity and fixed income--with all U.S. stock funds.

On a more level playing field comparing funds with similar investment styles, the results are quite different. According to data provided by Morningstar, SRI stock funds have outperformed their peers for most periods. As of May 31, 2000 (the most recent period for which performance results are available), the average domestic SRI diversified stock fund outperformed the average domestic diversified stock fund for the year-to-date, three-year, and five-year periods. Furthermore, 40% of SRI stock funds with five-year records have four- or five-star Morningstar ratings, compared with 32.5% in the general universe of diversified stock funds. About 11% of SRI funds with a three-year record have a five-star rating from Morningstar--in line with the 10% rate of the overall fund universe.

Palmeri states that the purpose of a pension fund such as CalPERS is to ''provide income for its members.'' He claims that a social agenda can ''muddy the waters, resulting in poor results in both areas.'' We believe that social screening enhances financial performance, eliminating from investment consideration companies that, due to their questionable business practices, may present significant risk to their investors. Screening out companies with potentially troublesome practices such as tobacco companies and nuclear power utilities has steered many SRI funds away from some of the market's worst performers in recent years.

Donna Marsh
Public Relations Manager
Citizens Funds
Portsmouth, N.H.

Video Violence Is Only on the Screen

There is little compelling scientific evidence linking video game violence with increased aggressive behavior in children (''Want a gory game? Let's see some I.D.,'' News: Analysis & Commentary, June 19). Author Robert Berner cites two academics to support his point of view and dismisses contradictory findings as the work of ''opponents'' of video game regulation. He does not acknowledge the volume of serious research produced on this subject that contradicts his claims. Most troubling, he ignores a December, 1999, report produced by the Australian government--the most thorough review of all academic research on video games and violent behavior to date. That study concluded that ''the accumulating evidence--provided largely by researchers keen to demonstrate the games' undesirable effects--does indicate that it is very hard to find such effects and that they are unlikely to be substantial.''

The Interactive Digital Software Assn. agrees that retailers should use their best efforts to avoid selling mature-rated games to persons under 17. Separately, we have continued to press efforts to promote awareness about the Entertainment Software Rating Board's (ESRB) video game ratings. In the final analysis, parents have the responsibility to control the games their children play, and ESRB ratings are the best way to carry out this obligation.

Doug Lowenstein
President
Interactive Digital Software Assn.
Washington

How Big Are Natural-Gas Stockpiles?

One correction should be noted in your otherwise insightful article about the value investors may find in natural-gas exploration20,000. Higher fuel costs and interest rates are keeping many buyers out of showrooms. And now there are widening worries of an economic slowdown in the not-too-distant future, which could depress shipping volumes. But Paccar's biggest woe is the generous trade-in terms that manufacturers offered in their grab for market share. Now, dealer lots are clogged with used trucks, and prices are tanking.

Because of his family's dominance--along with insiders, the Pigotts hold 40% of Paccar's shares--Pigott is under ophisticated management of gas supplies, as well as development of promising technologies such as fuel cells and microturbines that are positioning natural gas as the ''fuel of the future'' for large and small customers.

Roger Cooper
Executive Vice-President for
Policy & Planning
American Gas Assn.
Washington

A Little Music for the Night Students

I enjoyed ''The class of 2000'' (Photo Essay, June 26) at Harvard Business School. Future chieftains, mammoth salaries, and prestigious credentials do prove that Wonderland in our business world really does exist. Not to deny these ambitious kids their moment of glory, but how about a photo essay about the hardworking guys and gals who get their MBAs at night from not-so-prestigious addresses, who are fighting to balance work, family, and school? These folks may not earn high-powered salaries, work for Internet startups, or participate in ritual stomping, but they do carry the ''grueling'' responsibility of their families, careers, and education just the same.

James B. O'Hara
Cypress, Tex.

Nike Has Nothing to Hide

I was pleased to read ''Who says student protests don't matter?'' (Social Issues, June 12). I do, however, want to be very clear that the only motivation behind Transparency 101 is the desire to continuously improve how we do business and to allow consumers to hold us accountable for the conditions in the factories where our products are made.

We do appreciate that college students around the world are interested in the complex issues associated with global manufacturing. So much so, in fact, that Nike invited 16 students to monitor 32 of our partner factories around the world, and we published their uncensored findings on our Web site www.nikebiz.com.

However, Nike's commitment to improving the working conditions for the people around the world who make our products was made a long time ago, before most of today's students were even in college.

Second, Nike will be releasing the results of all the PricewaterhouseCoopers LLP monitoring that took place in Nike contract factories during the past year. We plan to release the results in phases, and we will follow up publicly on the areas identified by PWC as those needing improvement. Furthermore, we will post a sample report from each region.

We know a company can do good and also do well. Nike will continue working to improve the way we do business, from the factories where our products are made to the environment our business impacts to the communities where our employees live, work, and play.

Vada Manager
Director
Global Issues Management
Nike Inc.
Beaverton, Ore.

Culture Clash at DaimlerChrysler

''Taken for a ride'' (Book Excerpt, June 5) brought to light some of the culture clashes of the new global economy. The biggest cultural and political issue was the differences in salary and personal indulgences of the staff on opposite sides of the Atlantic. These issues will be a problem in any cross-cultural merger and are not inherent in this particular merger. When entering into a merger with overseas corporations, one has to realize not only the different cultural issues but, more important, the difference in political systems and taxation practices.

In the U.S., we emphasize individual salaries and a belief that most of our personal comforts are purchased with personal earnings. These earnings grow based on our hard work and dedication. In many foreign countries, the tax rate is much higher than ours, so a large salary isn't always the best way to reward executives. This is why many foreign corporations tend to enjoy lavish hotels and restaurants. It allows executives to enjoy a lifestyle that they could not afford even at twice their current salary, due to the tax burden. The result is that one side feels the other executives are overpaid, and the other feels executives waste too much money.

Being an American, I was deeply saddened that DaimlerChrysler is not a registered U.S. corporation. I also commend Chrysler President Thomas T. Stallkamp for standing up for what he believed was right. His actions are a stellar example of the difference between a manager and a leader. Leaders make the hard sacrifices for the greater good.

Will Gunzelman
Newport News, Va.