The Interview
By John Koch, Boston Globe
At 42, Sophia Collier is president of one of the nation's largest families of socially responsible mutual funds, Citizens Funds. The Portsmouth, New Hampshire, company has $700 million in assets.
When did you make your first million?
When I was 16, I left my home in New York City, and my first company was a construction company in Portland, Maine. I earned my first real money, $75 a week. In '76, I returned home and wrote a book about my life [Soul Rush] and sold it when I was 19; mercifully, it's out of print. I used that money to establish the soda company. Everybody in my family has continued in the literary field, and I went to the more gritty and mercenary world of commerce. I didn't go to college.
Did you lay out a plan of self-education?
When I had my first Soho distributorship in New York City, I used to sell from store to store to small retailers, many of whom were immigrants from all over the world. And from Aristotle and Muhammad and Mrs. Kim and Mr. Lee, I learned many things about how to do business and operate a successful enterprise. Later, when I became more successful and was no longer wearing a delivery uniform but was dressed for success in cashmere and pearls, I used that knowledge - of negotiation, bluffing, bargaining.
You've said you wanted to revolutionize the money-fund industry.
My goal was to revolutionize the socially responsible investing field, which was not really focused enough on achieving financial performance [in 1991, when Collier bought a controlling interest in Working Assets and changed the name to Citizens Funds]. Working Assets had an important heritage and about $200 million in assets. They were involved in South Africa divestiture and avoiding the military-industrial complex. I wanted to involve the fund with more contemporary issues.
What are some criteria for evaluating companies?
There has to be at least one woman or a person of color in an important position in the company, on the board or in the top two layers of management. It is the most likely thing for companies to fail.
Cite some other guidelines.
I'm not a pacifist. However, we don't want to be a Daddy Warbucks and have it be a good event that we have war. It's a moral decision not to be invested in companies that are primarily military contractors, including General Dynamics and even IBM. And we're not enthusiastic about the nuclear-power industry. Many banks have good policies on monitoring the environmental performance of the companies to which they loan; others don't. Domestically, we've probably screened every company of significant size, about 1,700, and we have about 800 that passed our criteria.
Name some of the most irresponsible companies.
We've seen some of the most disgraceful corporate behavior among oil companies. A lot of them are in bed with governments that are on a scale of Hitler - in Sierra Leone, Nigeria. In Burma, we have [energy firms] Unocal and Total. Such companies are not run by people who are stupid or blind - they have to know they're benefiting from every manner of horror.
Identify some good guys
Hewlett-Packard is among the great ones. Coca-Cola: It petitioned the Food and Drug Administration to allow recycled content in plastic bottles, creating a market for all those bottles we've been putting out at curbside. Basically, it's selling sugar water; however, it is a harmless pleasure. It has been a very important economic development generator all over the world; its bottling plants have been the providers of fresh water during emergencies in the Third World.
People have told me that I am. I maintain some of the sharp teeth of a New Yorker, but it's not necessary to express yourself in a Khrushchev-like manner in order to be determined.
How does Citizens Funds fare compared to conventional mutual funds?
Our fund family has been among the best performers. I've come to realize that our qualitative screening is a valuable investment tool. It's more than just a moral approach to things; it's a way of avoiding companies that are problematic.
So, a morally run company is apt to be more profitable than one that isn't?
Absolutely. Big, globally expanding businesses need unchanging values promulgated from the top if they are to be enduring dynasties. Otherwise, they'll just fall apart.
Is your company affecting business practices at large?
Socially responsible investment mutual funds are less than one-half of 1 percent of the entire mutual fund field. We serve in the vanguard, being a place where these values are stated and practiced. The concepts of socially responsible investing are spreading throughout all investing.
What are you first, social activist or money-maker?
My whole life, in some way, has been involved with trying to understand and make money.
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