Recently I read an article about ethical investing titled Investing with a conscience‘ and was put to some serious introspection. Where would I draw the line? Will I be only concerned with the bottom line or will I give credit for corporate social responsibility. The author raises issues about investing in companies like Tim Hortons and McDonalds, hinting that they are to some extent responsible for obesity in North America. But I have a clear conscience when it comes to investing in such companies and I would gladly invest if I have the money. In my opinion they are excellent companies innovative in being productive and also giving products that we find refreshing. Investment Guru Peter Lynch used to say, “If you like a company’s products, chances are you will love the companies (as investors) too” If someone loves their products so much that they go into excess eating them and become obese it is not the companies’ fault.

With regard to companies that pollute the environment (Nuclear Power Generation), or those involved in deforestation (paper mills, bio-fuels) I believe society at large is responsible for their existence. It is unfair or unwise to put in bad light an otherwise productive entity that provides much needed necessities of life by withholding our investments. As our needs change or technology evolves such industries die a natural death. Until such time through legislation and incentives we can limit the damage and clear our conscience as investors. So for me these companies are a go.

Next in rank come companies that do businesses in countries with oppressive regimes where human rights abuse is rampant or companies knowingly exploit child labor to show an impressive bottom line. To be frank with you I grudgingly permit myself to be an investor in companies doing business in countries with oppressive regimes for the simple reason, it will improve awareness in the public even under such dictatorship. Because of our moral/ethical standards if we shun them, it would only help isolate them further and their plight would be even more miserable. Sherrit Canada doing business in Cuba is a case in point, whose shares have appreciated in recent times soon after Fidel Castro stepped down paving way for a supposedly more liberal leadership.

Nike accused of child labor in developing countries like Pakistan, Bangladesh is in some measure contributing to the development of the local community in those countries. Some argue what happens to the innocent children whose future/ innocence is lost in the factories? For them my counter question is can you send a child to school on an empty stomach? While it may or may not be true that parents willingly send their children to toil in factories, but do the opponents of child labor have any alternatives? To me a child laborer is any day better than a child soldier which he may tend to become if no alternatives are provided.

That reminds me about investing in companies in the armaments production, particularly those that produce land mines and chemical and biological weapons. The author makes us think that they are the only things that kill or maim innocent public and suggest we may shy away from investing in them. What about aircraft carrying out carpet bombing or ballistic missiles armed with nuclear weapons? Are they benign? To me these are necessary evils that we have to live with and my excuse for investing such in companies is that these weapons can be used as effective deterrents.

So finally what kinds of companies do I avoid investing in? It is the companies whose products are a definite health hazard like those in the tobacco industry or companies investing in casinos that willingly make the public morally and literally bankrupt. No matter what be their justification, I find them to be lacking at best and loathing at its worst.

I haven’t covered some emerging industries like those doing pioneering research in stem cells and theirpromises to cure human ailments. Due to changed social awareness assume a private company in stem cell research invents a breakthrough process for human cloning. If it goes public, will I invest in that? I don’t know. Ask my clone, ‘may be definitely’ he has the answer.