Such declared "neutral, non judgmental" service to self-selecting investors nevertheless still promotes a particular discourse of values. How the "chosen criteria" are promoted must also be considered as activist shareholder and consumer groups may use such criteria pejoratively to influence company policy by targetted voting, consumer boycotts or government/agency lobbying.
|
Religious |
Often with a Christian basis (catholic to nonconformist) and with a pot pourri of targets. e.g. temperance: avoid investments in alcoholic drinks; gambling and pornography, anti-abortion. Note: Muslim, Hindu or other religious values relating to the practice of investment feature little, if at all. |
|
Anti-war/Pacifist/Ar,s trade |
- avoiding production and trade in armaments; both generally and particularly to regimes with poor human rights records. |
|
Health, Green and Animal Rights |
e.g. anti-tobacco and smoking; animal experimentation, sustainable environment. Categories targeted include pharmaceuticals, cosmetics, fur, farming - using "inhumane" methods or the practice of animal experimentation, quarrying and mineral extraction, non-sustainable use of tropical hardwood, excessive effluent discharge and use of pesticides, the nuclear industry and its health and safety record, greenhouse gas emissions |
|
Employment |
- we see "positive personnel policies" being favoured: trade unions, equal opportunities, gender and racial equality, no use of child labour, matching employment conditions in Third World countries with developed world economies. |
Ethical investment products have emerged rapidly albeit from a small base but note; the long list of criteria is not universally agreed nor necessarily coherent as a mix. Each entry above has positive and negative connotations. Ethical investment advice and products may avoid investment in
Some "ethical investment" criteria are product focused e.g. alcohol whilst others emphasise processes or company actions. The distinction is important but unsatisfactory - consider a few problems.
Investor Responsibility Research Centre (IRRC), a US information group, asks, "Does your company endorse the goals of the South African Council of Churches Code of Corporate Conduct? ".
The answer " NO " to such questions tends to label the respondent. Are these organisations trading too much on the word " ethical "? Is the advertising of the EI sector honest and informative? In other words how ethical is ethical investment?
There is an insidious and false associative implication. Business practice is polarised as good and bad. Those who do not invest by these precepts become " unethical ". The " committed " become " the virtuous ". The " Ethical investment " company differentiates and brands its products with statements such as " as many as 75% of top shares may have some 'unethical' link - abusing the world's natural resources, exploiting people and animals ".
The hedonistic and Epicurean acts of smoking, drinking alcohol and trading in arms attract Puritan disapproval yet the 35 % of the population who smoke would not agree that dealing in tobacco is particularly immoral. Smoking may be judged good or bad according to who gets the cigarettes. The same applies to arms production and supply - who is supplied and with what form of arms?
We may agree that a product (germ warfare product) or service (euthanasia) may be so destructive that it undermines high order principles relating to the preservation of human life. What if the maker of weapons of mass destruction has a particular intention of aggression and genocide?
Some products/services may be created for one use only - an immoral use - is likely e.g. a child sex shop or crack. But most products have multiple uses - some good, some bad. It is the user with the personal capacity, intention, foresight and the other conditions of moral action who decides the use. This is the American Gun lobby argument. A producer may collude with a user but it does not follow from immoral use that the producer or the production is immoral. Lets consider some cases.
The argument continues. Profits ("profiteering" is more emotively powerful) from making and dealing in arms are condemned particularly when sales are to 3rd world states - whose people are starving. But do we really know the buyer's proper defence and security needs? Since 1945 wars have been common-place often between third world countries.
Prudence and caution to protect one's own interests is a valid reason to hold arms. Readiness against real and potential security problems requires serious consideration. Talk of ethics will not protect against bullying aggression and coercion. Neither diplomacy nor alliances may be sufficient to ensure peace and personal prosperity.
In the post- Cold War era, which super powers have an incentive to contain local conflicts that might escalate into wider conflicts - even using weapons of mass destruction?
Those wishing to restrict or ban the arms trade should note the danger of anarchy if no dominant group can impose its will. Regional civil war brings famine, epidemic, and economic upheaval. Note events in Somalia, Liberia, Angola, and Rwanda.
Order and stability as a condition of development in 3rd world states, is difficult to establish. Sound defence is a necessary albeit not sufficient: perceived weakness attracts aggression more rapidly.
The "ethical investor'' is distinguished by a desire to direct investment to "socially responsible" purposes hence providing the means by which the people of an African state might help raise themselves from a state of misery and anarchy?
But what matters is not the weapons that flow to the 3rd World, but who has them and what they so with them - aggression or deterrence; to undermine a balance of power, or preserve it; as blackmail or coercion, or to enhance stability.
These are matters of world politics and international government policy e.g. when considering weapons export licenses. Are such matters beyond the knowledge and competence of investors? Can investment flows be fine-tuned in such a way as to permit weapons use for morally defensible purposes only?
Those campaigning to divert investment from arms producers concentrate on the destructive power of the arms. They frequently
Ethical investment is on stronger ground when objecting to arms flows to states with questionable human rights records and internal brutality. But there is no simple panacea. Sound political judgment is needed for difficult and complex circumstances. The regime of Milton Obote, from whom the West withdrew support, was replaced with western support by that of Idi Amin.
Yet the "pure ethical investor" skims over arguments about where such investment will lead. Purity of motive ignores possible outcomes.
The pacifist may admit that consequence of not carrying or using arms may be dire but still adhere to the absolute "thou shalt not kill" principle - which may harm the self and others. The "arm-chair ethical investor" little debates the dilemma.
Those who accept arms production and sales--subject to "democratic" safeguards (what are these?) recognise the calculation and politics. Ethical investors may believe in peace and stability but have little practical answer as to how these are to be achieved through workable international systems. Emphasis is given to the UN role in relation to resolving conflicts and encouraging international co-operation. However this is just as much a political view as arguing for strong defences and strong military alliances.
Do we test on humans and
Would opponents of work in these areas refuse drugs tested on animals that are essential for their recovery if they were sick?
The same applies to nuclear power debate. Do environmentalists want a return to coal power or Aswan dam hydroelectric environmental schemes?
Is smoking immoral? Do individuals have the right - of their own volition - to engage in a habit which shortens their lives? Perhaps deliberate marketing strategies to indoctrinate or the addition of sweetners to make tobacco smoke more palatable to the young are unethical but then compare smoking to adultery, deception, sponging off others and obesity - which are unethical?
Is virtue guaranteed by controlling the substances that people stuff into their bodies. If this is claimed as a moral issue then investment in tobacco, wine or whatever becomes sinful. However the claims reduce to a grim prospect human life and its natural virtues and vices. Serious analytical flaws become papered over by fashion ethics.
What are the variables?
True ethical investors would examine the merits of each case not just buy from an investment agency which just applies a checklist of criteria.
Do we differentiate between
Pornography that results in physical and psychological harm to others - is immoral. Arguing for soft pornography may be dismissed as a shallow response but.... the "model" may benefit from the income and the "in-private-no-harm-to-others" reader of a porn magazine maybe just a sad rather than an immoral figure.
With pornography as a target, moral judgment becomes linked also with the extremes of political correctness and the argument that pornographic practices reflect male ascendancy over women. The claim is that all pornography - as a universal - degrades and undermines women's' rights to equality for both pornographic subjects and all women regardless of their participation.
Assaults on the fur trade and refusal to invest in it - attack people who, through their business and work, achieve a relationship with the animal world that urban people never experience - yet the protestors are generally urban.
A well conducted fur trade is no more cruel than the meat or pet trade. Does it contribute to wild life protection? Do fur traders do their best to protect the animal habitats and populations?
Battery farming
Without investment, how are conditions in which animals are reared to be improved? The only coherent moral view is one that obliges us to
But products and processes as defined in the EI literature mostly neglect such virtues except for e.g. pornography and gambling and these may not always and seriously depart from the virtues. They express selective interest in certain virtues associated with vogueish conceptions of "justice" and narrow obsession with allocational rights. But what are their principles of selection?
Why is there concern about disparities of pay between men and women but little about honesty, duty, service, fortitude and their rewards?
A company which pays women less than men for the same work run foul of some EI guidelines. But what of a company that does not discriminate when it should e.g. by paying two people the same wage when one has worked harder than the other (nb: distributive justice - rewards should be different according to contributions made?)
Here one ethical/justificatory concern is selected (socialism/egalitarianism) and another neglected (individualism and fair reward for merit).
Virtue ethics see ethics as rooted in the intentions of people. " Consequentialist " ethics define right and wrong actions by their consequences - actions are good or bad according to whether they lead to good consequences. These are often a variant on a utilitarian theme - increasing the sum total of human happiness.
Some ethicists argue that happiness distribution is nothing really to do with ethics. But even if it is i.e. something adds or detracts from the total of human happiness, (as most products and processes do) then this must be assessed on the evidence.
Alcohol is pleasurable for many and brings misery to a few whose lives are ruined by alcohol-related disease or drunken-driving. Does the misery of the few outweigh the pleasures of the many? What of the gains for health services and schools paid for by alcohol taxes?
Such a debate depends on more judgment and juggling of values. The temperance linking of alcohol and net harm is an infringement of individual liberty as is the logic that any harm is the fault of the producer rather than drunk.
So, argument that based on a platform that certain products are ethical or unethical is amiguous and woolly. Certain processes and practices straddle a boundary but selective lists of virtues as criteria to decide the ethical or unethical are spurious.
In a few cases a product may make the producer (with evidence of foreknowledge) culpable if the use resulted in net harm or wrong. This is also the case for e.g. companies operating under oppressive regimes. But these cannot be assumed. To do so without evidence and analysis is itself unjust and hence unethical.
This and other lobbyist targets (demonstrations at the World Trade Organisation meeting in Seattle 1999) may have less to do with ethics and more to do with a malaise and individual dissatisfactions over modern Western consumer-driven economies.
Anti-carbon dioxide emission (coal power stations) and anti-nuclear power stations - are two main energy sources. How will we obtain continued electricity in the future or to we just revert to the water wheel and windmill?
Yet investors and sellors of ethical investment products do find acceptable products and processes. How? How do such scrupulous people justify the products they do invest in? If they are unequivocally scrupulous - they won't be satisfied if product or process A is mildly disapproved of. They will want complete assurance.
Weapons are made from metals, designed with computers, funded by banks, delivered by lorries. Weapons workers are fed by coffee machines and delivered sandwiches.
How then can the EI purist invest in such banks, computer companies, and mining and metal processing companies, lorry makers and others in the supply chain. If companies are charged with cynicism and hypocrisy why not the EI activists?
Other activists class products as good and bad: vegetarians, breast feeders, anti-road bye-pass and firework activists. The hate objects of such groups do not appear on the EI index of unethical goods. Why not?
The scrupulous conscience even in Christian moral theology can be seen as an obstacle. The scrupulous man is tormented in every action with the thought of doing something wrong when he is not.
Scruples may arise from melancholy, fickleness, timidity, want of a well-balanced judgment, pride and obstinacy. Many of these far from being "ethical" i.e. good, are indeed bad and undermining of the self. The common sense notion that "it is bad to find too much wrong with the world" becomes lost. The "finding of evil" everywhere paralyses thought and deed and distorts moral choice itself. Such exaggeration is a danger with "purist ethical investment".
Seeing more evil where there is little or none is a fault. Investors are acting in a linkered fashion not ethically - but possibly the reverse. Perhaps ethical investment should be called "scrupulous investment", leaving it ambiguous as to whether that word be used in its common or its theological sense.
John Righteous, the Investment Programme Channel 99.
Poorly constructed questionnaires are riddled with assumptions, leading questions and spurious categorisations. Garbage in equals garbage out. Who says that the market researchers are so skilled and non-partisan? It is hardly ethical to force answers from an individual using questionnaire method.
Questions posed may be justifiably private. In the crudest terms the information is "none of their business". The respondent may not trust the data gatherers to interpret and present the data objectively and/or fairly.
Remember compliance with the performance criteria offered by the ethical investment movement increases costs. Even filling in a form - has a cost of data collection and bureaucratic processing. Further costs are incurred in defending oneself against the claims of EI groups.
