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Ethical Investments - The New Investment Option
by Danca Risamio
http://www.ruinvestment.com
Ethical investment is a fairly new concept - look in a
university economics textbook from fifteen years ago and
there will probably be no mention of the term. However many
experts think that it is an idea whose time has come, that
perhaps it will be of major interest in the twenty first
century.
Ethics is one of the big questions that has taxed
philosophers since the beginning of time. It is about the
choices we make and how we choose to live, and the issue is
far from settled. As far as ethical investment is
concerned, it is enough to say people have different
ethical codes.
In terms of investment, the ethical investment movement is
founded on a new understanding of investing amongst
investors. In the past many individuals and institutions
happily entrusted their money and future to experts in
finance, simply asking them to search for the best return.
Once they had invested the money, most investors were only
concerned about the returns. The money entered a sort of
no mans land where it could not be touched and few worried
about the type of industries or companies they were
investing in.
This approach has caused problems for some. For instance
the Church of England found itself denouncing land mines
whilst the investment portfolio it held was pumping money
into the companies making the mines! It is easy to see how
this happened - the hierarchy of the Church, being
professional priests, gave the investment duties to
professional investors... Nowadays however, we see the
General Synod of the C of E looking over their investments
quite carefully.
Individuals have the same issues. Take the example of a no-
smoking advocate - someone who berates friends and family
who smoke, tries to get them to stop. Does it matter if his
finances include investment in cigarette companies, even as
part of a portfolio??
Many people are beginning to think it does matter, and
starting to ask what exactly their money is financing. One
result is that people are taking more interest in the exact
nature of their investments. Another result is the rise of
companies that will invest money ethically.
As mentioned above, there is no clear line that says A is
ethical and B is not. This means the individual has to
decide for themselves. What about a company involved in
production and sales of weaponry. Should you support them?
One point of view is that dealing with weapons and their
use is the job of governments and not individual investors.
Another person might prefer to invest their money elsewhere
(though they will find a lot of companies are involved in
producing weapons).
Other people are concerned about companies going to other
countries to employ cheap labor. Again, there are
different views - is this work for people who need it or is
it the exploitation of children? Are these jobs an
opportunity or are the companies stopping these children
from going to school? Some North Americans are concerned
about jobs going abroad when they are needed at home,
whilst others feel that outsourcing this labor helps the
home nation compete.
Whilst ethics is a far from simple matter, many feel it is
worth the effort. Individually it may be difficult to
change things but each additional person who makes a
similar ethical decision will in time effect change.
Companies who find investors moving their money are being
shown that their dealings are in conflict with the concerns
of societal ethics. As a result many will feel the need to
change.
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