Socially responsible investing

[puglogic]

I notice this is one of the discussion topics for Personal Finance, but I see very little discussion about it.

Does anyone make efforts to do socially responsible investing? Care to share what you do, what you avoid, whether your returns are the same, etc?

[SteveinMN]

I am careful where I spend my money when I'm in a store or buying services. But I do not participate in socially-responsible investing because that means handing the investment operations reins to someone else and I may not agree with their assessments of what constitutes a socially-responsible company. For instance, I may prefer that a socially-responsible fund invest in a car manufacturer with ties local to me rather than just the one with the highest Corporate Average Fuel Economy (or however they choose them). But I don't get a say in that; the fund managers do. And with the current corporate merger mania, it's sometimes very hard to tell the good guys. Cascadian Farm and Muir Glen are two manufacturers of good organic products. I'd invest in them. But both companies have been purchased by General Mills, which is a huge manufacturer of processed foods of low nutritive value and a huge consumer of GMOs and factory-produced goods. So are Cascadian Farms and Muir Glen no longer socially-responsible brands? Just too much of a minefield for me.

[puglogic]

Thanks, Steve. This is the same place I find myself. It seems like I would have to trust someone else's values. But that could just be my lack of knowledge about this area of finance showing. Perhaps I would have a say in things with certain firms. Hard to say without a lot of research....so I thought I'd start here. Minefield is right.

[ApatheticNoMore]

This is my thinking on this: if you want to go down to the level of choosing individual companies to invest in (stocks or bonds etc.) and manage your money that way, you will probably be able to find some companies that are mostly ethically responsible.

However if you don't want to put in that much effort to investing and just want to find a stupid fund to put money in already that isn't destroying the world - your choices are limited. So called "socially responsible" mutual funds exist. Their investments the last I checked were mostly big banks, which may or may not be one's definition of socially responsible (IMO it's not the worst thing out there ethically but ...). They will generally avoid big pollutors (this actually boils down to avoiding much resources and manufacturing but human beings still use resource and manufacturing - do I'm not sure much is achieved). And they'll often avoid sin stocks (liquor, gambling, etc.). And yea heavy on financials whose dirtiness doesn't dirty the whitest collar ;). So they are "sector plays" often without great returns. So then what? Credit unions of course, everyone knows about those, but they may or may not meet one's standards for either ethics and/or returns.

There's a book called: "Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity". It sounds great right? No not really, it spends much of the book lamenting people's existing choices, and then doesn't offer a lot of choices in return! So why even mention it? Because the few ideas it does offer (like you may be able to find local coops, local attempts at creating ecological comunities, local attempts to lend to individuals starting businesses) - basically small scale social lending (i think a term exists for this) are good and should grow. But the opportunities for that are limited right now and possibly quite risky. So yea (if it's at your library, definitely not worth buying, not enough content) it's good to be aware of such things, you might find yourself taking advantages of them at some point, but the opportunities are limited and it's simply not going to fund one's retirement at this point I figure.

More should exist, we really (collectively) need to rethink this investment thing so it's starts actually creating and investing more in the way of real value, rather than destroying the world. So investments in one's future actually help to build a better future. It seems to me it is possible a new type of corporation called a "B corporation" that has been created might help in this (but again that's more an idea that I'd like to see take off than all that common yet): https://en.wikipedia.org/wiki/B_corporation

[SteveinMN]

So called "socially responsible" mutual funds exist. Their investments the last I checked were mostly big banks, which may or may not be one's definition of socially responsible (IMO it's not the worst thing out there ethically but ...). They will generally avoid big pollutors (this actually boils down to avoiding much resources and manufacturing but human beings still use resource and manufacturing - do I'm not sure much is achieved).
Exactly my conundrum. I'm not keen on big polluters, but I think the human race is better off for having cars and trucks and Post-it Notes and apartment buildings than a greedy bunch of bankers or insurance agents. We all have our definition of "socially responsible".

[junkman]

One of the real ironies of SRI is that its definition varies so widely from user to user, and the results obtained vary from miserable to outstanding, like, way better than the broad market averages. Also, there is “Islamic” investing, and those returns aren’t shabby, either.

Poke around. The idea of Socially Responsible Investing is an interesting one that doesn’t necessarily impose a penalty on performance. In short, it can be an instance of "doing well by doing good".

[iris lily]

It seems to me that one definition of socially responsible investing is: invest in local companies that give back to your community.

Enterprise Rent a Ccar gave $1 million to our public library. Monsanto gives millions for local projects. I use both companies' products and services and would invest in them if I bought individual stocks.win/win.

[jennipurrr]

You may want to consider municipal bonds if they are going towards projects you believe in (and of course there have been some muncipalities actually default the past few years so not without risk). My mom is particularly proud she has a chunk of money in bonds for the local public university.

[iris lily]

You may want to consider municipal bonds if they are going towards projects you believe in (and of course there have been some muncipalities actually default the past few years so not without risk). My mom is particularly proud she has a chunk of money in bonds for the local public university.


Yep, I've got $20,000 in library bonds.

[awakenedsoul]

Yep, I've got $20,000 in library bonds.

That really appeals to me. I've been thinking about investing in a small piece of land down the street. Land here always seems to go up in value. I wouldn't get dividends, and I'd have to pay property taxes, but I think the return long term would be excellent.

My dad suggeted I buy some Phillip Morris stock. I don't want to invest in tobacco, though. At the time he mentioned it he was making 3%. I think that was about a year ago. Someone here mentioned that their Whole Foods stock had gone up to $89.00 a share.

[junkman]

It seems to me that one definition of socially responsible investing is: invest in local companies that give back to your community.

Enterprise Rent a Ccar gave $1 million to our public library. Monsanto gives millions for local projects. I use both companies' products and services and would invest in them if I bought individual stocks.win/win.

Monsanto is one of the world's most evil companies. You are inexcusably naive to believe otherwise.

[iris lily]

Monsanto is one of the world's most evil companies. You are inexcusably naive to believe otherwise.

Thanks for playing! luv my Roundup.

[goldensmom]

It seems to me that one definition of socially responsible investing is: invest in local companies that give back to your community.

Enterprise Rent a Ccar gave $1 million to our public library. Monsanto gives millions for local projects. I use both companies' products and services and would invest in them if I bought individual stocks.win/win.


Monsanto is one of the world's most evil companies. You are inexcusably naive to believe otherwise.

Many, many farmers use Round Up ready seed so unless one eats exclusively, proven organic foods (including ingredients) Monsanto is somehow involved.

[Rogar]

Monsanto is one of the world's most evil companies. You are inexcusably naive to believe otherwise.

That has pretty much been my conclusion. The fact that Monsanto fills some market demand for some products that may in some cases increase farm yields or help with our lawn and garden maintenance is a totally separate issue from their unethical business practices. Don't forget that they were also one of the biggest producers of agent orange.

http://www.naturalnews.com/037289_Monsanto_corporations_ethics.html

[bae]

I'm curious - what are the top-20 "world's most evil companies"?

[Spartana]

I'm curious - what are the top-20 "world's most evil companies"?Probably depends on which side of the fence you are sitting on. Uncle Sams industrial military complex does my sister a world of good job-wise but is probably pretty evil by many people's preception in most regards. Uncle Sam and his little military and Homeland Secruity forces have done me a world of good but probably not so for the people in other parts of the world. Monsanto probably ranks up there too but, again, if you are a starving African vilager dependent on GMO corn to survive you'll probably think they are a Godsend. And Halliburton has provided a huge amount of jobs and service to people in the USA, makes use less dependant on foriegn oil, etc... yet wreaks destruction on the environment. One man's savior is another man's downfall.

[The Storyteller]

Monsanto probably ranks up there too but, again, if you are a starving African vilager dependent on GMO corn to survive you'll probably think they are a Godsend.

Monsanto actually does more harm than good for third world food supplies.

[Rogar]

I'm curious - what are the top-20 "world's most evil companies"?

You'd probably have to establish criteria. There are organizations, like maybe the military industrial complex, that operate under the guise of making sacrifices for the overall good and protecting the good from the bad. And others who cause environmental or human destruction with the basic underlying motive of greed and profit with little regard for consequences or through gross negligence. For example, I would think Dupont would fall into the category of negligence over the Bhopol incident due to gross negligence and profit motivation. Maybe some of the fast food industry for marketing unhealthy foods to innocent youth through their attractive marketing.

[SteveinMN]

I also would posit that "evil" incorporates a certain opacity in operations (what does Google do with all of the data it collects and do you trust what they say they do? Exactly how did Halliburton spend the money they were awarded in DoD contracts? They're not the only ones who fit the "opacity" criterion, either). But, yes, one would have to establish criteria to determine exactly what makes a company "evil". I wouldn't limit it to companies, either. Corrupt non-profits and government entities should be eligible as well. :devil:

[ApatheticNoMore]

Almost all big (nationals and multinationals etc.) corporations give money to various charities. It's just not how I would evaluate a corporation being "socially responsible" (maybe I've just seen too much hypocrisy haha). But if that's how you want to evaluate you can agonize about whether an arms dealer supporting a homeless shelter is an ethical company or not, and get lost in that utilitarian calculus forever. Meanwhile real people are still hurt by arms dealt to anywhere in the world willy nilly, regardless of how many homeless were saved from freezing to death.

This is how I evaluate, in this order:
1) is the basic product a company sells ethical and they way they go about selling it and making it ethical? This is the company's reason to even exist. It's reason to exist is not to solve charitable problems (or it would be a non-profit). One might say it's only reason to exist is to maximize shareholder value, and while true economically, that's pretty empty socially and not why we allow companies to exist period. With Monsanto, I'd say no, their basic product and the way they go about it is not ethical
2) how does a company treat it's workers? I mean if the company treats it's workers like total garbage but gives to AIDS funding in Africa, I'm not inclined to look all that favorably on it. Might the AIDs funding in Africa do a lot of good and save lives? It might. Still I think: charity begins at home. If you can't even treat your employees who do so much to make your company possible well, I can't be inclined to look at your charitable work as anything other than hypocrisy.
3) only then my charitable work come in. It's nice if companies donate some profits to charities and the community.

[rosarugosa]

ANM: I like you evaluation criteria. Very well-reasoned.

[puglogic]

ANM: I like you evaluation criteria. Very well-reasoned.

Me too. Thanks for that.

And now you all see why I'm in such a quandary over this, and have never done jack about it LOL

[iris lily]

I am pretty sure one of our friends is going to open a business locally and may well ask other friends to invest in it. Because this person has done some ethically dodgy things, tiny things, but things that make me go "hunh?" I wouldn't consider it. Well, realistically, I wouldn't invest with anyone in a business here anyway since they all seems to
come up with the idea of selling 1) cutesy crap no one needs or 2) food service items in a small establishment.

[junkman]

I notice this is one of the discussion topics for Personal Finance, but I see very little discussion about it.

Does anyone make efforts to do socially responsible investing? Care to share what you do, what you avoid, whether your returns are the same, etc?

I attempt to invest in a manner that doesn’t cause social harm, which means I need to define what I mean by ‘investing’.

When you buy shares of a company’s stock in the secondary market (or their bonds in the secondary market), you aren’t really “investing” in that company except very indirectly. Yes, your buying (or selling short) helps to support (or depress) their stock price, and a company can convert rising stock prices into money for themselves through acquisitions done by issuing shares. But the most direct way to invest in a company is by buying their products or services. That marketplace matters hugely to a company, and it can make or break them. E.g., that’s why I avoid Monsanto’s products. They are an evil, despicable company who attempts to hide the harm they do. I'd love to see them bankrupted for lack of business. The predatory lenders is another whole industry I'd like to see bankrupted and jailed. Ditto the military weapons producers, etc.

Some good guys? Les Schwab tires. I've been doing business with them for 25 years. Interactive Brokers, Zions Direct, and E*Trade. Very good firms to deal with. Book sellers generally. They get a lot of my dollars. Goodwill Industries. I'm happy to support them through donations and through purchases.

Charlie