Once a niche market in the investing world, ethical funds
are now much in demand by a greater segment of those who invest money. In this
world, acronyms like SRI, ESG and CSR are becoming more commonplace.
Socially responsible investing (SRI), environmental, social and governance
criteria (ESG) and corporate social responsibility (CSR) are familiar terms for
those who are concerned with more than just the bottom line.
But is ethical investing really possible? “There are important questions that
need to be asked about what issues are vital to your moral code…”, writes
journalist and blogger Jason Kirby. Once you have arrived at answers to those
questions, you can then decide if there are certain companies or portfolios
whose actions are in line with the principles you hold dear.
There are myriad questions and issues that can be investigated. Climate change, water use, deforestation, chemical weapons, dealings with oppressive regimes – what is it that is important to us? What is it that is truly ethical? And how do we get a full picture of what is happening inside organizations?
There are certain research houses that compile data for us and maintain indices. But are the standards of fund managers or research houses our standards? For example, some “old vices” like gambling and pornography are not seen in the same light as they were even a decade ago; and some SRI funds invest in companies as long as no more than 10 per cent of its sales come from “problem industries.”
But is ethics a 90% ethics? Is it ethical to support ones
principles 90% of the time, but not the other 10? Can one be trustworthy if one
is truthful 90% of the time? Are these practices prudence or selling out? We
need to decide for ourselves what, for us, “the ethical” is and if it is
something malleable or a sure and guiding principle to live by, regardless of
the material costs.
