By Nick Lyth
I also dislike the term, Ethical, when applied to investments. Ethics? This is the realm of classical Greek philosophy, not of the investment world, a world traditionally disassociated with ethics of any kind. Ethics? Really? I don’t think so. Profit, greed, ambition, yes. Ethics, no.
“Responsible” is a word that gets us closer to a real connection between investment, business, and what both do for one another and to the rest of the world. Responsible investing is possible as a workable concept. Define “responsible”. It’s a viable term, although your definition may be different from mine, and therein lies a problem. It reaches the limits of its value as a communication in this context very quickly.
However, the word I want to suggest we start using now, is “positive”. I can say that “every investment we make at Green Angel Syndicate is a positive investment, and that we only make positive investments” because we make investments in order to make a positive difference to the world we inhabit, not a negative difference.
I think this works best of all, because it is so easy for us all to agree on its meaning. What are our positive values? Can you not answer that question for me? Here are a set of words. Health, repair, improvement, endurance, tranquil, temperate, settled, comfortable. Life. These are all words that are positive for you and for me, and for everyone around us. Their opposites are all negative. I don’t have to go through them for you. Apply these words to whatever you choose – the weather, the climate, the landscape, the economy, the political world, community, religion, your own home, indeed your life – and you know they are all words that mean “good”. Their opposites mean “bad”.
Now apply them to the investments you and I can make. Investments in companies that promote a positive difference are good. Investments in companies that promote a negative difference are bad.
Let me put these blanket assertions into context. Let’s look at the Footsie 100, and ask: positive or negative? Here are the top ten companies calculated according to Market Capitalisation (i.e. the total value of its shares), with my judgement.
I should stress, my judgement is subjective, ill-informed and highly coloured by my critical feelings for those in positions of power, and their failure to act soon enough to avert what has become a terrible, but wholly avoidable, threat to human life on the planet. My judgements are therefore wholly fallible, but it’s worth asking, would you make the same judgement?
It’s pretty bleak, in my estimation. These are the biggest companies in the world, and they are not doing anything much good for the world, by the standard of Positive difference as against Negative difference.
I am going to save the next part of this argument for another day, but you might like to explore it for yourselves before I do. What do you imagine these ten companies claim, in terms of their ESG policies and activities? This is the term they all use to claim virtue in trading with responsibility and care. It is useful for them, because it creates such a blur of meaning. It hides the reality of “responsibility” and “care” behind the foxy acronym, that needs explaining before anyone really understands its significance. Look for yourself, if you care to test my hypothesis, that these people are cynical, exploitative hypocrites. I think you will find they all claim ESG to be part of their purpose.
Meanwhile, stop investing in these companies, call them out, start asking about Positive Investment whenever investments are in question, and start making investments that you know are Positive.