The not so ethical investments
By Charles Wanguhu
Financial institutions offering Ethical investment in practice exclude companies with interests in armaments, oppressive regimes, nuclear power, tobacco, vivisection, gambling, alcohol and pornography. Environmental (and ethical) investments also aim to invest in companies with positive effects on the environment. Characteristics of such companies include but are not limited to: socially responsible, environmentally conscious companies, and equal opportunity employers.
With the above in mind what recourse would an ethical investor have on discovery that their funds were being deposited in a manner that did not conform to their moral expectations.
A roman Catholic Bank in Germany was forced to offer an apology after a newspaper discovered that it had acquired stocks in defense, tobacco and birth control companies.
Der Spiegel newspaper discovered the bank had invested 580,000 euros in British arms company BAE Systems. The bank also invested 160,000 euros in American birth control pill maker Wyeth. The Catholic Church abhors contraception and the Pope has been vocal in re-emphasising this stance. The anti-contraception stance has been present since 1968 and the current Pope Benedict XVI has not faltered on this stance.
What remedies would an investor have: Sue for breach of contract? Report for false advertising? And in light of the latter in the event the investments were actually profitable what would the investor do with the unethical returns?
Great post Charles… gives alot to think about
To play devil’s advocate: Were the investors explicitly promised by said Roman Catholic Bank to uphold the churches interpretation of ethics or did they assume Roman Catholic ethics would be used when deciding on which companies to invest in?
And unless it is explicit in the investment contract I don’t think investors should have the right to sue becuase it is as much their responsibility as it is the banks to be aware of where their dollars are being invested. In general, investors should do more research before signing on the dotted line.