Ethical stock market investing is an alternative definition for ‘socially responsible investing’. In a nutshell, this basically means investing in funds or companies that support policies which are deemed ethical in every sense of the word. Thus, one should invest in companies that care for the environment and do not harm people or animals in any manner. This also means that one should not invest in companies whose sole intent is to take advantage of the underprivileged or make their money dishonestly.
Unfortunately, a host of companies these days fuel their success by engaging in illegal activities, lying, cheating and misrepresenting themselves in various ways. Making money is their focus and integrity and honesty is not in their vocabulary. Due to the deviousness of many businesses, worldwide rules governing businesses that deal with other countries were implemented by the International Labour Organisation. Although the rules were set in place for international trading, they should be applied to any business which wishes to be renowned for being socially responsible.
Investors and consumers have a major impact on the world, therefore they are extremely influential. Therefore, ethical or socially responsible investment should integrate personal values and display appropriate and responsible behaviour. Investors should know exactly what their money is doing. Thus social and economic consequences, as well as environmental, should always be taken into consideration.
So how does one practice ethical stock market investing?
Choose to invest in companies with integrity:
First and foremost an ethical business is not made up of unethical employers. Choose to invest in companies that do not discriminate, underpay their workers, ostracise those who join trade unions or promote child labour. In some cases, employers play a game of what is called ‘continual employment blackmail’.
What this basically means is that they prey on those from underprivileged countries and force these employees to hand over personal identification, passports and so forth, in order to force them to work for a pittance. They convince the uneducated and naïve employees that they are lucky to be employed at all. They also convince them that this is normal procedure. Therefore, prior to investing in any company, do some research and find out how reputable they are.
Get written reports in regards to exactly where your investment is going.
It doesn’t matter what area of stock market you plan to invest in, get written reports about where your investments are going. Request a copy of the prospectus so that you know exactly what the policies are. Your financial adviser should be able to provide you with all the details you need. Be adamant that you want to invest in something ‘green or ethical’. You want all the details to prove that it is.
Research every single company you wish to invest in:
Generally, tobacco companies and weapon manufacturers are deemed unethical due to the fact that they endanger lives. It is a well-known fact that cigarette smoking is related to cancer. It is also a well-known fact that armed robberies have dramatically increased. Besides, many of these companies are known for exploiting their employees as well as the environment. Some are said to engage in unethical practices. Find out if companies such as make-up manufacturers experiment on animals. These defenceless creatures often go through agony in the name of beauty.
Evaluate the products and services well.
Perchance the company is very charitable and involves itself in a host of community related services. Perhaps the company even makes good sized annual donations to worthy causes. This is all well and good. But if the company is engaged in the illegal dumping of waste it is acting unethically and illegally. Investing in companies that have no ethical morals or ignores the law is basically saying “I am condoning your actions”. You are basically helping them to scale the ladder of success.
Check out Multinational Monitor:
By going to http://multinationalmonitor.org/-one can soon learn the names of the companies that engage in unethical behaviour/activities. Multination Monitor tracks corporate activities especially in the Third World. You can read reports of companies who export hazardous substances, ignore employee health, safety and bullying. Read about labour union issues and so much more.
Invest in companies that offer services or products in a positive manner.
Companies that pride themselves on ensuring that their employees work in a safe and happy environment are priceless. When employees are comfortable within the workplace, feel safe, secure and protected, productivity increases. The company gains a good reputation and displays its integrity and social responsibility. Therefore it gains positive feedback and a giant thumbs up.
Do your research and make a list of companies that with poor reputations.
Make it known to your financial adviser that you do not wish to invest in any of these named companies. Keep this list near at hand and have the names of the companies listed in alphabetical order for quick reference. This will come in very handy if someone suggests that you invest in such and such a company and you can’t remember if it is a socially responsible or not.
Only invest in products or services that promote and support the health of others or assist people:
Only invest in products or services that promote and support the physical or mental health of others. Companies that focus on helping others in some way are socially responsible in every sense of the word. If the companies support environmental issues as well, they’re certainly worth investigating thoroughly.
Check out these two sites:
Check out ethical investment lists at www.ethicalinvesting.com/- their mission statement is to provide investment resources including mutual fund investment resources and stocks and so much more for ethical investors. Read the techniques and philosophy section which is a wonderful guideline for investing ethically. Read about Monsanto, the world’s most unethical and harmful investment.
Visit www.sensible-investing.com/- as well. The sensible investor will find this site a wonderful source of knowledge and advice for investing ethically. Learn about investing with integrity and confidence. You will learn a step-by-step approach to investing as well as be provided with answers to a host of questions related to the investing process.
Give considerable thought to what is ethical and responsible stock market investing:
What Is The Ethical Investment Dilemma?
What is ethical to one person may not be deemed ethical by another. Everyone has their own personal standards, thus a different code of morals. Therefore, one needs to give considerable thought to what is deemed ‘standard ethics’ by the majority of people. Most socially responsible investors focus on companies that endeavour to make a positive contribution to the environment, world and its people.
Fortunately, there are a host of differing policies which ensures that one will meet with your approval. It is imperative that you give thought to the reputation of companies and fund managers in regards their ethics. One can find a great deal of information online in regards to ethical stock market investments. There are a number of online organizations that publish their own research and opinions on ethical stock market investing. One of the best to be found is at www.ethicalcorp.com/-
“Let every individual and institution now think and act as a responsible trustee of Earth, seeking choices in ecology, economics and ethics that will provide a sustainable future, eliminate pollution, poverty and violence, awaken the wonder of life and foster peaceful progress in the human adventure.”
~~John McConnell, founder of International Earth Day~~