Investing with your conscience – and with common sense

Ethical investing is a bit broader than donating, since the benefits extend beyond supporting a cause to also expecting a financial return

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Joe BattyMany financial new-age thinkers encourage people to invest ‘ethically,’ based on the notion that your money should be invested in things that do good – for your community, your country or humanity more broadly – instead of just creating financial returns.

We’ve been programmed to consider return and risk as the primary (if not only) issues evaluated when deciding what to do with our money. And, in fact, most people never even get involved in these decisions,  deferring to the financial advisers who now dominate the investment industry.

But investors need to take back most (if not all) of the power they’ve deferred to the industry. I’m not alone – many advertisements now target industry problems. Excess fees and unscrupulous pressure tactics are the most common topics of these ads.

So the mantra among a growing group of money managers goes like this: “As we amass these huge pools of money, there needs to be a total rethink about whether this money is actually doing some good.”

The priority is to protect your savings while doing some good.

Unfortunately, that opportunity is very rare. Banks and investment funds have either abandoned this sector or ignore the topic. Very few alternatives exist and the ones that do require a lot of digging.

And what would convince you that you’re helping your community, your country or humanity?

These are very personal issues, like those you consider when you donate money to a worthy cause. Ethical investing is a bit broader than donating, since the benefits extend beyond supporting a cause to also expecting financial return.

So perhaps you should examine your investment choices the way you direct your donations. The cause should align with your beliefs and family history. For example, if a family member is stricken with heart disease or cancer, you may donate to a related charity. Could you also, then, invest in companies that provide treatment or services in these fields?

Two issues come to mind:

  • Where do you find these companies?
  • You still must consider return and risk, since such business have a higher degree of failure or simply grow slowly.

Part of the problem is that formal infrastructure to inform people of such investments simply doesn’t exist, particularly for those who have smaller amounts ($5,000 to $50,000).

There are, however, some interesting investments emerging, including:

  • Solara Fund allows online investors to observe and access emerging technology companies seeking investment. Members choose from the offerings based on their preferences.
  • Alberta Council of Technologies, Pro-Ventures Pathway Inc. and an Edmonton-based credit union are about to launch a new technology fund for emerging Alberta innovations. Fund members can choose investments whose attributes suit their beliefs.
  • Troy Media Digital Solutions (the host of this article) has recently developed a new business strategy for local and regional newspapers to modernize their companies, moving them into the digital world and creating a pool to access national advertising and bump up their revenue streams. You can invest in a vital community industry and an emerging venture at the same time.

So you can invest ethically, serving yourself while helping your community, your country or humanity more broadly.

Joe Batty, chief financial officer for Troy Media Digital Solutions Ltd., is an accountant with a specialty in new asset management. Joe has more than 40 years of experience in finance and accounting. Email him at battyj@telus.net


investing, conscience

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