Views on Ethical Investing

GBY

orangeslimes wrote: »

I hate the idea that if you just give money to charity after making money from whatever then that makes it ok.
For example you make money investing in the manufacture of arms to blow people up and then donate to a charity helping innocent civilians in war torn areas? Surely that is doing things the wrong way round?

I think ethical investment is an important concept- and hopefully the idea of it will become more mainstream and less people will want to make money "anyhow"

Also there is the argument that for example companies that do something to improve the world - e.g come up with more environmentally projects are likely to become increasingly important in the future (and make more money consequently)

Very good points The last paragraph is the point I was looking to elaborate, looking to the future I would have thought companies looking to improve their emissions etc. will become more attractive. Regarding spread of risk, in my case this is to supplement two company pensions and cash savings for retirement. I have little control over where my company pension is invested but would feel better not willing on a company to sell more arms in order that my retirement is marginally more comfortable.

Masomnia

To me it really is one of those 'thin end of the wedge' things. Where do you draw the line? I own something like 1 x 10^-28% of BP, does that mean I'm 1 x 10^-28% responsible for their oil spillages and accidents at refineries? Sounds a bit rediculous. But if I am I guess that also means I can take that much credit for the money they invest in renewables.

Is it wrong to buy a Libertines CD if I know Pete Doherty is going to spend the money on herion and screw up his life and the lives of others?

It isn't about 'making money "anyhow"' it's about making sensible decisions to grow your wealth, to provide for your future and that of your family.

Debt_Free_Chick

You'll find all companies now practice environmental responsibility, sustainability and support for the community. Check out the website for any well known PLC

HumanEnergy

GBY wrote: »

Very good points The last paragraph is the point I was looking to elaborate, looking to the future I would have thought companies looking to improve their emissions etc. will become more attractive.

I recently switched a small amount of my stakeholder pension investments into an environmental fund for that very reason. As environmental concerns grow I think the value of those types of companies could start to get higher. The unit price went up 7% in the week since I switched too, which is nice, but I don't think looking at the price after one week quite fits in with taking a long term view

Debt_Free_Chick

HumanEnergy wrote: »

I recently switched a small amount of my stakeholder pension investments into an environmental fund for that very reason. As environmental concerns grow I think the value of those types of companies could start to get higher. The unit price went up 7% in the week since I switched too, which is nice, but I don't think looking at the price after one week quite fits in with taking a long term view

You're right to be somewhat sceptical.

Why did the price rise by 7%? One stock? A specific sector?

HumanEnergy

No idea, haven't looked at it properly, just noticed this morning that the price was up 7% compared to when I purchased my units last week. It's the Scottish Widows stakeholder pension environmental fund.

orangeslimes

You'll find all companies now practice environmental responsibility, sustainability and support for the community. Check out the website for any well known PLC

Yes but many are really just PR exercises.
Also the reason they exist is due to the increased popularity of things like ethical investment.

Masomnia wrote: »

To me it really is one of those 'thin end of the wedge' things. Where do you draw the line? I own something like 1 x 10^-28% of BP, does that mean I'm 1 x 10^-28% responsible for their oil spillages and accidents at refineries? Sounds a bit rediculous. But if I am I guess that also means I can take that much credit for the money they invest in renewables.

As an individual obviously you don't have much power- but collectively you do have some. Part of the reason BP invest in renewables and advertise it heavily it because it makes them more attractive to investors who want to feel they are contributing positively to the environment.

It isn't about 'making money "anyhow"' it's about making sensible decisions to grow your wealth, to provide for your future and that of your family.

Of course you want to make decisions to for yourself and your family, but individual people and families do not live in bubbles unaffected by what happens in the wider world and society.

I think there are a lot of practical problems with trying to invest ethically- but I think it is one way to encourage companies to act in a more responsible way. It is not just about taking the approach of avoiding any company you think is acting in an unethical way but putting pressure on them to act differently.
(although personally i don't think this is possible in the case of arms companies and i would avoid them altogether - BAE produced a ridiculous report about their environmentally responsible weapons which i wish i could find again)

LongTermLurker

elwy wrote: »

Originally Posted by LongTermLurker
Therefore, if say Shell do something to reduce their impact, or go into biofuel research, they could be included because they are improving, though they're still producing something else that pollutes.

That's why I gave up on ethical funds. I think wriggly has got the right idea - make money anyhow and then donate to your chosen charities.

Jupiter Env Inc isn't really an ethical fund though, it's an environmental fund - the goal is to invest in companies doing something positive for the environment, not necessarily following specific people's morals (this ties in with orangeslime's last paragraph as well).

That's why I chose Env Inc over their Ecology fund - the Ecology fund doesn't necessarily do anything special, it simply excludes a portion of the market that may do well yet is objectionable by the investment team's standards. I drink alcohol so don't object to it, neither do I object to investing in meat production, but I do object to investing in genetic engineering, arms, etc. Environmental funds seem quite clear cut; I was actually considering in putting some money into the Jupiter Ecology fund this year, but if nothing else, writing this has made me remember why I chose not to in the first place.

wriggly

LongTermLurker wrote: »

I drink alcohol so don't object to it, neither do I object to investing in meat production, but I do object to investing in genetic engineering, arms, etc.

If we all refused to invest in alcohol companies, but kept drinking their products, would they reduce their production? No.

If we all invested, but stop drinking, would they reduce their production? Yes.

Conclusion: what you do as a consumer has much more effect than what you do as an investor, at least at the level of relatively small indirect investments that we're considering.

If you want a reduction in arms manufacture and genetic engineering, avoid buying goods and services from those companies.

Of course, as a taxpayer, you don't get much choice when it comes to arms, but this is where your political rather than purchasing power plays its part.

LongTermLurker

wriggly wrote: »

If you want a reduction in arms manufacture and genetic engineering, avoid buying goods and services from those companies.
.

Makes sense - I buy food locally, don't buy genetically-modified food where I know about it and have given the AK47 away to charity :rotfl: