How important is Ethical Investing?

That’s interesting to know. I reckon its commonplace as the investor is not actively selecting stocks.

Like everything in life ethics is important only in an idiocentric way. If you’re happy with the way you’re living your life that’s all you can do.

Personally I don’t invest directly in things like oil, mining and big pharma. But I have bought trackers, and I do use cars, metals and drugs, so it’s completley hypocritical in a way.

Like I say, all you can do is follow your own moral compas as best you can.

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I agree but I’d also add tobacco, gambling, alcohol, some big food (McDonalds, Tyson, Kraft Heinz, Coke) and chemical corporations (Bayer, BASF - glyphosate / pesticides). Everyone’s definition of what’s ethical differs.

I think we all owe it to ourselves to “poke our head above the parapet” and expand our awareness, especially around personal consumption. Where do those items come from? How are they made? What and who is involved.

This shapes your ethics and consequently your investment decisions. If you could buy a slice of the future, what would you want it to look like?

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I love this. Well put!

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Very True. You have to let it guide you as best as you can. The older I’ve gotten the more ethics has been the forefront in all purchasing decisions.

This discussion got started after Ben shared why ethical investing is important to them here -

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Welcome Ben, great back story. I like to invest in supporting the companies I use and seeking out ethical investments whenever I can. Would be interested to know if anyone has an easier way of identifying their own ethical investments.

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Yeah, one of the big challenges with ESG/SRI investing space is that investors’ definitions of ethical can vary widely. And you get these ethical investment frameworks/indices that look at eco and social impact, worker conditions, corp governance etc, but even there you get companies that are good on one dimension but not another. It’s hard wading through it all - in the end I bought some of these as a start (don’t think either are on FT though):
FP Foresight UK Infras Inc A GBP Acc F00000ZLSR.L
FP WHEB Sustainability C GB00B8HPRW47.L

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Actually this is a good read on the challenges and opportunities of ESG investing https://11fs.com/blog/future-fintech-wealth-esg-most-important-thing-youve-never-heard

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There’s some really good info being shared here so I’ve moved the conversation over to stop it being lost in the introduce yourself thread :slight_smile:

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Hi Ben,

Loved reading your backstory and journey. I can co-sign the feeling of purpose and being able to help others in society.

I’ll let you know if I come across anything meaningful about investing in Africa.

All the best.

Curtis

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Although not a stock or ETF. I wondered if anyone has heard of Ecosia, the search engine that plants trees with every search.

You can simply add it as an extension in your browser or download the app. It’s a small way to help the earth but I really admire the concept.

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Wow that is amazing, thanks Curtis for the link, is the sort of thing I am into and a great start.

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Glad its useful, Ben!

The D.I.Y Investor (aka John Edwards) has started to cover green investing.

See his blog posts on the subject here:

http://diyinvestoruk.blogspot.com/p/green.html

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Been using it for around 1yr now. Tbh I rarely switch to Google, perhaps for less than a handful of searches per month. They’re transparent with their financials too and how much is spent on replanting projects around the World.

I think that ethical investing is a very tricky subject as it is highly subjective and is just an endless spiral.

For an investor who thinks gambling is unethical, would that exclude them from buying uk gilts because of the state ownership of the lottery? Even though 25% of lottery revenue goes towards a fund that provide grants to good causes?

For those opposed to the petrochemical industry, are all companies equal? e.g Royal Dutch Shell develops and invests in renewables vs Sinopec which does not.

What about state bonds for those who think that state imposed taxation is theft or are opposed to the concept of the nation state? What about companies that receive taxpayers money in some form?

For those against abortion, what about medical companies that provide supplies or services to abortion providers?

Medical companies make plastic syringes that are bought and used to administer heroin which then kills people… and the syringes are not eco friendly. Does that mean all companies in the syringe making supply chain are unethical and complicit in the deaths relating from the use of their products or services?

Would a company be seen as unethical if a ceo, owner or even employee did something perceived as unethical even if if wasn’t directly related to the company?

What about companies that operate in countries with the death penalty, no environmental regulation, laws against homosexuality, laws targeting women, state surveillance, poor human rights records etc…

When it comes to ethical funds it gets even trickier as unethical companies are those the manager of the fund considers them to be.

I really think “ethical investing” is just a hyped up buzzword targeted at middle class millennials.

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11:FS’s Simon Taylor wrote an interesting blog post about this recently. He argued that companies should be measured based on their impact -

Let’s take an oil producer who buys lots of carbon credits. Or a tobacco company who spends a lot of profit on charity initiatives. A plastic producer who is carbon neutral. All of these companies can score well on many “ESG” measures.

Impact is more than carbon offsetting for your evil.

Impact is about what a company produces. If a company produces oil, it doesn’t matter how many carbon credits they buy, their impact on CO2 emissions is negative. If a company produces biodegradable drinks straws but doesn’t yet donate massive amounts to charity, their impact is still positive.

what do you think?

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This blog was in Tumelo’s email today

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The FT’s arguing that ethical investing & making money are in conflict here -

I’ve just seen a nice (although quite corporate) counterpoint from someone at a16z (one of Silicon Valley’s biggest VCs) though -

customers who care about social responsibility can not only leave, but can influence corporate behavior in the same way that customers who request or desire new features or service offerings do. And it’s the job of the board and the executive team to respond to this broad array of customer demands and prioritize them appropriately. Failing to do so will mean the end of the corporation and the destruction of shareholder value. In this way, responding appropriately (and proportionally) to customer needs drive long-term growth, profitability, and shareholder value. Everyone wins.

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