When I talk to friends and acquaintances about investing and personal finance related things, one of the questions that I’m often asked is about what kinds of companies I hold stock in. I list things like Mcondalds, Chevron, Pfizer and Wal-mart and one of the comments is inevitably, “Those companies are evil and harmful to the world!”
My short answer is that nothing is black and white and that the world I live in is filled with a lot of grey. And here is my long answer and take on Ethical Investing:
Almost any company is any industry has a mix of good and bad and it’s really too simplistic to say something like Mcdonalds is 100% bad. Sure, they may exploit workers, but don’t all restaurants? And many of their employees are workers with essentially no marketable skills who can’t necessarily demand a higher wage. They also provide cheap, quick meals to millions of busy people every day.
What about Chevron, or BP or Exxon? They spill oil and destroy the environment. I get that and think it’s as terrible as the next person, but find me someone who hasn’t ridden on a car, bus, train or plane in the past week.
And the pharmaceutical industries with companies like Pfizer. They only develop drugs that they can make money off of and charge too much for their medicines. Yes, it’s true, but find me someone who hasn’t taken any form of medication in the past year.
Big banks, like Banco Santander and Bank of Montreal (I hold both)- they are greedy! Yes, I agree but if people really thought big banks were so terrible, then why aren’t credit unions far more popular than they are?
And everyone’s favorite evil company: Wal-Mart. Sure, they exploit workers and bully suppliers. But, they also provide poor people with products that are far cheaper than the little corner store in their small town. Millions of people walk through their doors each day and people just aren’t willing to pay more to get things from a more “ethical” place. It’s not Wal-Mart’s fault.
Ethical investing? It’s far too complicated of a thing to even attempt for an amateur like me. It’s hard enough picking companies to invest in, without this whole other factor mixed in.