Is socially responsible investing impossible?

“Successful people have a social responsibility to make the world a better place and not just take from it”
Carrie Underwood

I’d love to hear your thoughts on whether it’s possible to invest ethically.

If you have a portfoliio you may want to invest in companies that are good to people or good to animals or good for the environment or all three. Trouble is socially responsible investing is much harder than you think. In practice my experience has been that it’s virtually impossible.

When you are investing you need a good return. That return has got to be better than the interest rates of a term deposit or why bother taking the risk? Then how ethical are we talking?

Most companies are a mixed bag. They make planes that help you to get around, but they pollute and another arm of the company makes military planes. Some are sold for peace keeping to one group while another group buys them for genocide. All from the same company. Meanwhile the commercial plane plant is taken off shore to the lowest bidder. People work hard for very little money and there are a lot of people out of work in the town where the plant used to be. Conditions of work in the new factory might be terrible and child laborers might be a major part of the workforce.

My view is that ethical investing is noble, but impossible without compromise. No company is the perfect mix of profitable and socially responsible. However, the act of simply considering who you are going into business with is a massive step forward from where we are now. Caring is key. Investing with a completely decoupled view solely focused on making money is never going to help change the world for the better.

What are your thoughts? Is it possible to invest in a socially responsible way?

2 thoughts on “Is socially responsible investing impossible?

  1. I only invest in people I know- my brother’s flooring company, my daughters daycare, etc. I don’t make as much but it has been pretty consistant thru the years.

    • Thanks Ric. Good advice.

      Sounds like it works for you and I guess it makes it easier to figure out where to find people when you need to have one of those investment conversations :). Any tips on how to make the money – family relationship work well?

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