This blog was in Tumelo’s email today
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.
Thanks for sharing @alex.s
There is a biting point where you have to be earnings focused as there’s a business to run but also exploring if there is growth opportunity in demonstrating that you as a business care about other factors. Which I think there is. There’ll always be scenarios were people may not care, but there’s definitely a growing interest in people not wanting to financially support obvious negative causes.
Lots of companies are exploring the triple bottom line - People, Planet, Profit.
Speaking of which - when are you getting some SRI ETF’s or stocks on the platform lol?
If I objected to what I didn’t like in a company I couldn’t invest in any of them.
So my limits are gambling and tobacco. I won’t invest in any of the new cannabis firms either despite believing they will make a huge profit.
I’ve not come across anything else that I utterly refuse to invest in as not a single part of it could I support. I think that is the key thing. So for example I don’t like pharmaceutical firms for various reasons such as the way they test products etc, but I still invest in them as I still overall support the work they do which after making money of course is to help to make people better.
Businesses aren’t one dimensional, just like people there will be good and bad aspects to all of them.
I try to look at it as a ratio, if I feel they either:
*do more good than bad, or
*the good they do outweighs the bad they’ve done
Making a cool product isn’t good to me, its expected - but more things like what you’ve said in terms of saving peoples lives vs. animal testing.
It has to be case by case, because take ETF’s as an example. you may have 1 firm that’s ‘unethical’ and 499 that are ‘okay’ so it becomes a challenge for an investor.
Oil, tobacco, gambling, companies with poor records in workers rights, poor environmental records, Nestle, Manchester United…
People are more conscious that their decisions matter
Okay I’m going to have to sell my Imperial Brands now - I feel convicted!
Indeed before freetrade I felt that problem. It is nearly impossible not to invest in either a gambling firm or a tobacco firm in a funds since these are such huge enterprises. It is one reason I am delighted to be able to invest in individual stocks and why I can enjoy investing that much more. I won’t stop using funds, but it’s great to feel happy with your portfolio.
Another nasty one is companies who makes guns and bombs. I’m not a pacifist, but I really hate war and killing. I haven’t invested in a defence company yet, still not sure what I think!
It’s actually not so much the weapons making as the customer base I object too…!
Yeah like Lockheed Martin - just don’t go near those.
The way I see it - is if they need to “defend” the government will give them money anyway and get into debt. They don’t need mine.
Unfortunately a company who isn’t allowed to sell its products doesn’t survive. A country who cannot buy weapons doesn’t survive either. Without getting any further politically!
Not investing in British’s American Tobacco cost me a bit over 30% earlier this year. Still don’t know how I feel about this. People will buy tobacco whether I invest or not. Also how about how countries are built off the profit of tobacco crops ( I know it’s a reach ). But getting serious again what about the advertising agencies, or tech companies who take their money? It gets all complicated in my mind. Maybe I’m overthinking it.
It is one of those things that everyone has to be persuaded and answer for themselves.
I invest in oil. Some people that is an anathema. They couldn’t possibly support BP, polluting environments, supporting dodgy regimes, dirty dirty money in so many ways. I get that, but I drive a car, fly on planes, use plastic and want BP to continue doing that for me. If Imperial Tobacco and Ladbrokes goes belly up the world will be a better place. Sadly they won’t.
I agree with @Rollingskies
It’s a question that has to be asked and answered with oneself and ones own worldview.
But just the very fact that people question before investing is a great start.
I understand the argument that if I don’t invest others will, but to me, weirdly, that supports my use case as they don’t need my money.
One unrelated advice is when Warren Buffet says not every stock is an opportunity, you don’t have to invest in everything - and although that was not about ethical but more about FOMO and controlling choices - I think it applies equally in this scenario.
Tobacco farmers need jobs too I’m kidding, they can grow something else.
Yeah, I didn’t invest in British American Tobacco but have a small position in Imperial Brands*.
*blame @Certi.Curti’s videos ( I’m kidding but subscribe to his YouTube ).
Quite true… wasn’t there a vegetable shortage not too long ago that’ll cost UK supermarkets like £8m
haha am I an influencer?- I’ll probably sell soon because this thread always gets me thinking. I think Tobacco is the lowest of my ethical threshold but still on the wrong side.
Thanks for the shoutout!
Strange as it sounds, I could barely care less about so-called socially responsible investing.
To my mind, it’s bordering on virtue signalling and I don’t invest to be some sort of moral arbiter.
The problem’s that it is so subjective. You could argue that nigh-on any company is ethically questionable in some way or another, so I prefer to park such considerations at the door.
Each to their own though!
I have no problem investing in Tobacco, smoking is a choice. I don’t do it but while people have that choice I’m OK with making a few quid off it. For a long time I didn’t invest in tobacco out of fear that people would stop being so stupid. Now I’m confident that’s not gonna happen
No It’s not strange at all, I understand.
I genuinely agree with the fact that every company is questionable ethically, but for me personally what the business sells vs. some things they may have done is slightly different. Both matter to me but one more so than the other.
Investing you kind of feel a few steps removed from the actual organisation (although we’re “owners”) but if for example we had to walk into a weapons company and directly give them our money and watch them use it to make a gun to give to someone - I wonder if people will feel differently.
I actually invested in IMB not because of Tobacco per se - but because of the growth of E-cigs which is materially better than cigarettes - and I assumed that would continue to drive earnings - I also assumed they would get into Marijuana some day - which is arguably healthier.