It’s so sad. The good old corporate dinosaurs that are making a buck from industries that do more damage than good are coming under increasing pressure from managed Ethical Funds. Over the past few years the amount of money invested in ethical funds in Australia has doubled to over 50 billion dollars. Surprise, surprise those investors who put their money in managed ethical funds received a better return than from the traditional managed fund.
It seems, as far as 21st century capitalism goes, as long as you have money left over after paying your bills you can make a good buck by investing in managed funds that invest in industries and projects that do the least harm. That doesn’t mean they don’t cause damage, what it means is they cause less damage than traditional managed funds.
The industries these funds don’t invest in include tobacco, gambling, weapons, coal, deforestation, intensive animal farming, aquaculture. These funds, like traditional funds, invest in shares, property, fixed interest and cash. Interestingly, none of the top 10 ethical investment funds has a policy of not investing in businesses that do not pay award rates, that ensure overseas based workers are not exploited and support trade unions in the workplace.
Although these funds do give investors some choices that may have a benefit, they don’t seem to be investing in community based co-operatives and collectives. The lack of the ability of collectives and co-operatives to garner start up finance is a major impediment to the growth of a sector of the economy that could have a profound impact on employment possibilities.
Although green capitalism and ethical capitalism are a better option than legacy capitalism, they are still driven by the need to make a profit. How they make that return to shareholders could make a significant difference to people’s lives.
The best way to address the issue of ethical investment is to ensure superannuation funds have a statutory obligation to look at ethical funds before legacy funds. By by-passing funds that create profits irrespective of the human, social, environmental and national costs, governments can increase local employment, protect the environment and ensure workers enjoy all the protections that are guaranteed by law. Unless the legacy funds are starved of capital we will, as a community, have to continue to pay the financial, social and community costs of their unethical behaviour.
Dr. Joseph Toscano