When I put the Ethical Investing blog carnival out of its misery, I said I would replace it with regularly scheduled posts on the topic of ethical investing. I also asked for others to send me links to their posts or websites on the subject. I have not kept my word.
Ron Robins, of Investing for the Soul, has gently reminded me about his site, twice. I'm sorry it took two times for me to post something.
Investing for the Soul is a great resource for those looking for ethical investing information. This includes information on green investing, corporate transparency and social responsibility, how religion interacts with investing, mutual funds, and many other topics. The site also has a list of suggested books and offers fee based services, such as helping you find investments that comport with your values, investment research, and portfolio auditing. Workshops and seminars are available as well.
If ethical investing interests you, pay Investing for the Soul a visit.
Showing posts with label ethical investing. Show all posts
Showing posts with label ethical investing. Show all posts
3/19/08
Shareholder Activism: Ethically Investing in "Evil" Companies
Ethical investors (e.g., those who support human rights, animal rights, environmental issues, and so on) almost by definition avoid stocks of companies that are engaged in unethical activities (e.g., animal testing, environmental degradation, human rights violations, etc). That is, ethical investors usually invest only in companies that meet their criteria for ethical behavior. For instance, ethical investors might avoid oil stocks in favor of clean energy stocks.
I'd like to talk about a more counterintuitive approach to ethical investing.
First, however, I'd like to draw a distinction between investing to make money and investing to make the world a better place. While these goals aren't mutually exclusive, they are different. Ethically investing to make money usually means finding companies that don't do anything unethical, whatever one's definition of that is, and from those selecting the ones whose share prices you think will go higher. The second goal, on the other hand, is more like supporting a company or the industry that one thinks is ethical. Making money here is a secondary objective. Investing, in this sense, is the benefit one derives from the companies or industries succeeding and making the world a better place.
The approach I'd like to talk about is more like the second goal, but it's not necessarily opposed to the first.
While ethical investors usually avoid the so-called vice stocks (oil, tobacco, weapons, gambling) as well as pharmaceuticals and environmental polluters, they don't have to.
When you buy stock, you become an owner of a corporation. Those who hold a company's stock have several rights and privileges which include:
attending shareholder meetings and asking management questions ("So, Mr. CEO, why is it that you do business with the repressive regime in country x?"), writing to the company and receiving a response, and, if you hold $2,000 worth of stock for over a year, filing shareholder resolutions. Shareholders vote on proposals at annual meetings, and ethical investors can use these to try to steer companies away from certain activities.
While most shareholder resolutions are defeated, especially when management opposes them, they still have an effect. For example, it brings the issue front and center. In other words, it gets management's attention. Moreover, sometimes management can be won over, whether from an economic or purely moral standpoint. Additionally, if a resolution makes it to a shareholder meeting, the media can pick it up, and this further attention can stop a corporation's unethical behavior.
If owning $2,000 worth of shares seems too small to affect anything, consider what happens when you band with other similarly minded people, whether in an investing club, a public interest organization, or a church group. For example, Amnesty International has successfully engaged in shareholder activism at such companies as ALLTEL, Carlisle, and Exxon Mobile. PETA has been filing shareholder resolutions at Pfizer.
So, how is this investing? If shareholder activism changes unethical corporate actions for the better, everyone wins. Changes in corporate behavior may also help the bottom line, as when positive news may attract more customers. Even if shareholder activism appears not to change anything, you're still trying. While you're at it, you're collecting dividends or riding the stock as it's increasing in price. You're earnings are derived ethically, even if they come from an unethical company. (The share price can also go down and dividends are sometimes cut, but that's something to consider before you investing--the risks, potential gains, and your other reasons for buying the stock.)
While a majority of one's ethical investments should probably be socially responsible companies, they don't all have to be.
I'd like to talk about a more counterintuitive approach to ethical investing.
First, however, I'd like to draw a distinction between investing to make money and investing to make the world a better place. While these goals aren't mutually exclusive, they are different. Ethically investing to make money usually means finding companies that don't do anything unethical, whatever one's definition of that is, and from those selecting the ones whose share prices you think will go higher. The second goal, on the other hand, is more like supporting a company or the industry that one thinks is ethical. Making money here is a secondary objective. Investing, in this sense, is the benefit one derives from the companies or industries succeeding and making the world a better place.
The approach I'd like to talk about is more like the second goal, but it's not necessarily opposed to the first.
While ethical investors usually avoid the so-called vice stocks (oil, tobacco, weapons, gambling) as well as pharmaceuticals and environmental polluters, they don't have to.
When you buy stock, you become an owner of a corporation. Those who hold a company's stock have several rights and privileges which include:
attending shareholder meetings and asking management questions ("So, Mr. CEO, why is it that you do business with the repressive regime in country x?"), writing to the company and receiving a response, and, if you hold $2,000 worth of stock for over a year, filing shareholder resolutions. Shareholders vote on proposals at annual meetings, and ethical investors can use these to try to steer companies away from certain activities.
While most shareholder resolutions are defeated, especially when management opposes them, they still have an effect. For example, it brings the issue front and center. In other words, it gets management's attention. Moreover, sometimes management can be won over, whether from an economic or purely moral standpoint. Additionally, if a resolution makes it to a shareholder meeting, the media can pick it up, and this further attention can stop a corporation's unethical behavior.
If owning $2,000 worth of shares seems too small to affect anything, consider what happens when you band with other similarly minded people, whether in an investing club, a public interest organization, or a church group. For example, Amnesty International has successfully engaged in shareholder activism at such companies as ALLTEL, Carlisle, and Exxon Mobile. PETA has been filing shareholder resolutions at Pfizer.
So, how is this investing? If shareholder activism changes unethical corporate actions for the better, everyone wins. Changes in corporate behavior may also help the bottom line, as when positive news may attract more customers. Even if shareholder activism appears not to change anything, you're still trying. While you're at it, you're collecting dividends or riding the stock as it's increasing in price. You're earnings are derived ethically, even if they come from an unethical company. (The share price can also go down and dividends are sometimes cut, but that's something to consider before you investing--the risks, potential gains, and your other reasons for buying the stock.)
While a majority of one's ethical investments should probably be socially responsible companies, they don't all have to be.
3/3/08
Ethical Investing Blog Carnival, March Edition
Welcome to the March 3, 2008 edition of the Ethical Investing Blog Carnival.
Bloggers were invited to submit articles on ethical investing, which includes such topics as environmentally friendly, people friendly, animal friendly investments; what makes an investment "ethical," can it be profitable?, what commonly called "ethical" investments are anything but that?, is investing in the so called "vice" industry necessary unethical?, and the like.
There were 24 submissions for this edition. Here are the best four:
Hung Nguyen presents Adding Values to Your Investment: FTSE 4Good Index posted at Meaningful Issues in Today's World, saying, "Would you like to add not only value, but values to your investment? This blog looks at Vanguard's socially responsible investing option. The Vanguard FTSE Social Index is based on the FTSE 4Good Index which has a rigorous screening of funds. I analyze the fund's performance, fees, and its holdings to see if it is worth investing in."
(Fit) Cat presents Sustainable Responsible Investment and my super posted at Fit Cat, saying, "Investing responsibly for retirement through a Sustainable Responsible Investing superannuation Australian fund option."
Alexander Kohl presents Who Furthers Sustainability? | Green to Profit - Becoming a Sustainable Entrepreneur posted at Green to Profit - Becoming a Sustainable Entrepreneur. He examines how non profit organizations, government, businesses and individuals each promote sustainability.
Leon Gettler presents 100 most influential people in business ethics posted at Sox First. He writes about Ethisphere magazine's list of ethical companies and business leaders.
That concludes this edition. Submit your blog article to the next edition of Slackerwealth's Ethical Investing Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.
Technorati tags: slackerwealth's ethical investing carniv, blog carnival.
Bloggers were invited to submit articles on ethical investing, which includes such topics as environmentally friendly, people friendly, animal friendly investments; what makes an investment "ethical," can it be profitable?, what commonly called "ethical" investments are anything but that?, is investing in the so called "vice" industry necessary unethical?, and the like.
There were 24 submissions for this edition. Here are the best four:
Hung Nguyen presents Adding Values to Your Investment: FTSE 4Good Index posted at Meaningful Issues in Today's World, saying, "Would you like to add not only value, but values to your investment? This blog looks at Vanguard's socially responsible investing option. The Vanguard FTSE Social Index is based on the FTSE 4Good Index which has a rigorous screening of funds. I analyze the fund's performance, fees, and its holdings to see if it is worth investing in."
(Fit) Cat presents Sustainable Responsible Investment and my super posted at Fit Cat, saying, "Investing responsibly for retirement through a Sustainable Responsible Investing superannuation Australian fund option."
Alexander Kohl presents Who Furthers Sustainability? | Green to Profit - Becoming a Sustainable Entrepreneur posted at Green to Profit - Becoming a Sustainable Entrepreneur. He examines how non profit organizations, government, businesses and individuals each promote sustainability.
Leon Gettler presents 100 most influential people in business ethics posted at Sox First. He writes about Ethisphere magazine's list of ethical companies and business leaders.
That concludes this edition. Submit your blog article to the next edition of Slackerwealth's Ethical Investing Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.
Technorati tags: slackerwealth's ethical investing carniv, blog carnival.
2/3/08
Ethical Investing Blog Carnival
This is the first of what (I hope) will be many blog carnivals on the subject of ethical investing. To me it seems there is a paucity of blog writing on this important issue. The blog carnival's purpose is to encourage more bloggers to write on the subject, and to assemble these posts in one convenient place for readers.
Below are three excellent submissions that were accepted, out of a much greater number (many submissions were off topic).
Hung Nguyen presents Socially Responsible Investment: Can it beat traditional mutual funds? posted at Meaningful Issues in Today's World, looks "at socially responsible investing (SRI). The idea is that by investing in socially responsible companies that you can improve your return. I quickly review the book The SRI Advantage and then look into the problems of SRI and why I won't invest in it."
Socks First presents CSR, Creative Capitalism and the Recession, exploring the following questions: "What's the future of corporate social responsibility? That's the unanswered question with the prospect of a bad US recession looming, threatening to take the world with it. Will companies continue to embrace it when they are battling for survival? Or will changing market conditions redefine corporate social responsibility."
Edith presents Prosperity is a Flow posted at Stewart Hsu, in a thoughtful post saying,"Money, like love, is meant to be circulated. See the value in having a conscious awareness of this balance between giving and receiving."
Below are three excellent submissions that were accepted, out of a much greater number (many submissions were off topic).
Hung Nguyen presents Socially Responsible Investment: Can it beat traditional mutual funds? posted at Meaningful Issues in Today's World, looks "at socially responsible investing (SRI). The idea is that by investing in socially responsible companies that you can improve your return. I quickly review the book The SRI Advantage and then look into the problems of SRI and why I won't invest in it."
Socks First presents CSR, Creative Capitalism and the Recession, exploring the following questions: "What's the future of corporate social responsibility? That's the unanswered question with the prospect of a bad US recession looming, threatening to take the world with it. Will companies continue to embrace it when they are battling for survival? Or will changing market conditions redefine corporate social responsibility."
Edith presents Prosperity is a Flow posted at Stewart Hsu, in a thoughtful post saying,"Money, like love, is meant to be circulated. See the value in having a conscious awareness of this balance between giving and receiving."
That concludes this edition. Submit your blog article to the next edition of Slackerwealth's Ethical Investing Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page. Topics have to pertain to ethical investing. This could include, but isn't limited to, discussions of environmentally friendly, people friendly, animal friendly investments; what makes an investment "ethical," can it be profitable?, what commonly called "ethical" investments are anything but that?, is investing in the so called "vice" industry necessary unethical?, etc.
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