Would you knowingly invest in a company that uses child labour, is owned by organised crime, has terrorist associations or other unethical activities?
For most people the answer to these provocative questions would be a resounding “No”.
Yet, how can investors be assured about the type of investment they are making? How do we, so far from the rest of the world, know whether the practices of the offshore organisations we’re investing in are ethical and sustainable? What are the validated measures that we can use to verify actions with promise? And are our on-shore organisations performing as we think they should?
Unfortunately, some of the most unethical investments show higher returns, especially in times of economic hardship.
Tobacco stocks, for example, are often regarded as among the least volatile shares listed on the stock market because these companies’ customers tend to be addicted to the product and this business generates enormous amounts of cash, almost regardless of the economic climate.
Similarly, demand for alcoholic drink may even rise if there is a recession and many defence businesses profit from seemingly perpetual conflict all over the world.
Much is made of ethical investing these days with companies rushing to boast of their “social responsibility” drives, while recycling and offsetting carbon footprints have become the norm.
A green or ethical/SRI (socially responsible investment) fund is a fund where the choice of investments is influenced by one or more social, environmental or other ethical criterion.
While there is no one standard for morals, some traditional values are held by a large population that include respect for honest people, looking after our environment, and not creating, assisting, or even inadvertently causing disease, death, and destruction. How far each person will take this issue is a personal matter.
Companies such as Prometheus Finance Ltd http://www.prometheus.co.nz/ offer responsible saving and investment choices where your money earns attractive interest rates and is used to support only socially and environmentally responsible projects throughout New Zealand which help build a future that is fit for our children and our grandchildren.
For a list of ethical investment organisations within New Zealand check out http://www.ethicalinvestment.org.nz/
So, by investing ethically, we are able to put our money where our ethics are while helping to ensure we leave a wide variety of resources in good heart for future generations.