Why Investing Ethically Now Means Digging A Little Deeper

It is better to live in a democratic society where people make their own decisions about how they spend their money and how they save it, than one where those decisions are imposed on them.

- Hamish Mcrae

It is a tough one. Do investors have to choose between ethics and profits? It ought not to be a choice, for companies that behave badly usually get their comeuppance in the end, while those that treat their customers and employees well ought to be able to make decent returns.

But in the real world, the comeuppance often seems to take a long time a-coming, while truly ethical companies sometimes lack the drive to produce good profits. The debate has given a new twist to ESG investing - putting money into companies that have approved environmental, social and governance performance. It is an enormous, multi-sided issue, and people have strong views on both sides.

It is not simply that companies are accused of "greenwashing", ticking the boxes that allow them to qualify as ethical investments, rather than materially changing their behaviour. There is the wider issue of whether a company that drills for oil or makes armaments could ever be deemed ethical. This is genuinely difficult. Is supplying arms to Ukraine to help it defend itself against the Russian invasion the moral thing to do? If so, someone has to make those weapons. That debate will rage on.