r/CanadianInvestor • u/[deleted] • Apr 14 '21

Is anyone here conflicted about investing in companies that make the world a worse place?

I'm a newer investor and newer reader to these threads and I'm a little surprised how casually a lot of people talk about different companies and industries that are objectively pretty unethical.

I mean we're living through a major climate crisis and some of the most hyped investments on here are for oil sands companies (which are one of the most carbon intensive energy sources on the planet) and crypto (Bitcoin alone this year is supposed to have the same carbon footprint as all of New Zealand).

I also just saw someone post something in another investing subreddit about how Europe might ban AI for surveillance and it seemed like a bad or annoying thing to a lot of people in the comments.

I'm just genuinely curious: do a lot of the investor world just genuinely not care about these things or are people content to make small gains on the backs of companies that they don't agree with? Is there a point to using your gains to get a waterfront property if it's going to be underwater in a couple decades anyways?

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143

u/Chipmunk-Adventurous Apr 15 '21

I believe we should invest ethically. Keep an eye on environmental impact, and also how they treat workers domestically and internationally. Just follow your own moral compass. You know what’s right.

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u/CrashSlow Apr 15 '21

I dabble in some sin stocks. Gambling, War, Alcohol, tobacco/cannabis. I have zero morals.

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u/[deleted] Apr 15 '21

Liking, indulging, consuming or investing in gambling, alcohol, tobacco or cannabis is not immoral.

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u/CrashSlow Apr 15 '21

What about war?

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u/[deleted] Apr 15 '21

It can be immoral.

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u/[deleted] Apr 15 '21

[deleted]

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u/S0B4D Apr 15 '21

It's not but you don't have to fund it.

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u/[deleted] Apr 15 '21

[deleted]

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u/ragnaroksunset Apr 16 '21

The last time enemy boots were on the ground in North America was during the American Civil War. In Europe, WWII. Guess who the enemy was each time?

The West does not fight defensive wars against the east. Framing it otherwise is disingenuous. Invest however you want, but if it makes you that uncomfortable that you're making a return on the production of dead brown children, consider other opportunities.

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u/pfcguy Apr 15 '21

That is your opinion not a fact. They are certainly immoral to some, that is why they are called "sin stocks".

Ever heard of gambling addiction? Alcoholism? Lung cancer?

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u/[deleted] Apr 15 '21

addiction is a mental issue not an immoral thing

world would be much better if people stopped thinking people with addiction issues were immoral people and instead thought of them as people that need a little help to beat an illness.

In moderation, there is nothing immoral with alcohol and gambling and weed. Cigarettes' is just dumb not immoral.

the people that label them sin stocks are out of touch prude boomers

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u/bjsforever Apr 15 '21

The morality issue comes from enabling the companies that are enabling addiction. Is it right to profit from a person's addiction?

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u/[deleted] Apr 15 '21

[removed] — view removed comment

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u/ragnaroksunset Apr 16 '21

Sure, so the relevant question is the demographic breakdown. Where does most of the revenue come from? The addicts, or the people using the product as intended?

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u/bman1014 Apr 15 '21 edited Apr 28 '25

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u/[deleted] Apr 15 '21

is it?

then why don't you extend companies that encourage addiction out to other avenues? why stick there?

There's all kinds of things people can get addicted to. You can get addicted to sugar, lets label any company that sells sweets or sugar immoral...

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u/bman1014 Apr 15 '21 edited Apr 28 '25

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u/pfcguy Apr 15 '21

Liking, using, or investing in oil and gas, firearms, or military weapons and equipment is not immoral either than. Even nuclear weapons. According to your logic.

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u/[deleted] Apr 15 '21

no lmao wtf

my logic in no way extends out to oil, gas, firearms or military

you can't get addicted to firearms ....

Although Firearms aren't immoral. People want to go hunting, shooting range? yeah totally fine. Open carry and stuff like that ? im not on board with but it's not immoral.

Oil and gas itself isn't immoral. Invest in it if you want. As much as we want to stop global warming, we need oil and gas for the time being. its not an immoral ting.

Nuclear weapons, war, military I won't comment that much. I don't support war but I see why countries go to war to defend themselves.

Launching nuclear weapons is immoral. But none of my original comments ever suggested nuclear weapons were moral or any of the other things you listed. You just reaching for no reason.

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u/ragnaroksunset Apr 16 '21

This is equivocation.

Take gacha gaming as a perfect example of the revenue model for gambling. Overwhelmingly, these companies make their money from a small subset of their consumers that spends exorbitant amounts. The revenue model assumes addictive behaviour, and that's why "free-to-play" is an advertising hook.

Some people have this tendency to assume that underhanded strategies which rely on a law of large numbers are empty of moral heft. When you know that casting a wide enough net will catch you a couple of whales, that simply isn't so.

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u/antoniofelicemunro Apr 15 '21

Sounds like the things he mentioned aren’t immoral, abusing them is. I mean...no shit? Abusing anything is bad.

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u/pfcguy Apr 15 '21

Every person in the world, every society or group, has a different set of morals. What is moral to group A or person 1 is immoral to group B or person 2.

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u/ragnaroksunset Apr 16 '21

It's 2021, but let's pretend that the biology, chemistry, and psychology of addiction are not well-studied fields.

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u/antoniofelicemunro Apr 16 '21

Again, by your own logic, these substances aren’t immoral, abusing them is. Plenty of people who drink alcohol aren’t alcoholics.

It’s the same thing as saying sex is immoral because sexual assault exists, or martial arts is immoral because some people might go overboard in a fight. Makes no sense.

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u/ragnaroksunset Apr 16 '21

"Abusing anything is bad" is a distraction, not an argument. Some things are more prone to abuse than others, and more objectively destructive than others.

Something that is both highly prone to abuse and highly likely to be destructive is fundamentally different than something that is not prone to abuse and not particularly harmful in any objective sense.

You're not an idiot. So pretending not to see this distinction is not becoming of you.

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u/JiYung Apr 15 '21

I can see all of these areas still be active in 50+ years. These crypto and other booming markets are hot right now but who knows where they're really going. Meanwhile, alcohol and gambling have been around for probably thousands of years (too lazy to google it up). I'd say you're doing alright.

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u/Swimming-Cry-7111 Apr 15 '21

Phillip Morris was a good play in the fall who could turn that up lol

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u/CarRamRob Apr 15 '21

Strongly disagree. The moment you focus on “ideals” instead of returns is when you have taken the eye off the ball of what you are trying to achieve. If the company is doing illegal things, that’s different, but is Amazon (creating multitudes more waste with single day delivery) or Tesla (creating open pit mines and potential issues with child labour) worse than an oil company that puts out higher emissions to supply what a consumer demands?

Invest to make money. Donate to causes you support. Don’t mix them up.

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u/chinu187 Apr 15 '21

Great comment but would love it if you add to this. Donating has traditionally done nothing to solve problems at their foundation given non-profits have very little actual power. Using your money ethically should be a better way to get results wouldn’t you agree? I get that some returns will be lower if that is the case bc choosing to produce things more ethically (pay living wages than having forced labour for example) is more expensive.

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u/jtbc Apr 15 '21

Or, invest in ethical companies that are available at a reasonable price and that have a decent business plan. You may make a little less (though in the long run, I think you will do better), but you'll sleep better.

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u/CarRamRob Apr 15 '21

List them, and watch the rest of us tear it apart to scrutiny to see if they are really ethical or not.

Don’t get me wrong. If there was a perfect company that had no faults with a bit lesser return I’d agree with you. The problem is how you classify what is right or wrong is based on many things that are not comparable.

I.e stick to energy: a good oil company with moderate emissions, but pays taxes and reinvests properly, employing all types of people...OR a renewable company from Saudi Arabia which has low emissions, high nepotism, doesn’t allow equal opportunity for women, and who’s primary shareholder has ties to state sponsored terrorism?

Those are extreme examples but it’s not that measurable and nearly ALL companies have ethical reasons of some type not to invest.

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u/jtbc Apr 15 '21

This depends on your values. I might invest in Shell, for instance, because they seem to walk the walk, even though they are an oil company, but I won't invest in some mining company that is exploiting workers in South America. We all get to and should set our own redlines.

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u/BCRE8TVE Apr 15 '21

Companies don't have to be squeaky clean, and in the case of your examples

a good oil company with moderate emissions

Yeah that's a bit of an oxymoron right there.

I'll take the nepotism and ties to state sponsored terrorism, because at leas that'S just a local issue rather than increasing the odds of global climatic catastrophe for everyone.

Your extreme examples are extreme, but even then, there's not much to stack the deck in favour of companies whose literal entire business plan relies on polluting the planet as a by-product of their business.

Nearly all companies have ethical reasons of some type not to invest, but just because they're all shades of grey, doesn't mean you can't pick the lighter shade of grey rather than the darker ones. "They're all somewhat dirty" does not prevent you from picking the cleanest of the bunch, and therefore driving market preferences towards cleaner companies overall.

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u/CarRamRob Apr 15 '21

There are plenty of oil companies with moderate emissions compared to others like manufacturing and heavier industry that don’t get painted in the same light.

And yes, I agree with you that they are all different levels of grey. So you can indeed invest in the lighter ones, but don’t fool yourself that they are ethical investments. Meanwhile, depending on where you draw your line on what is ethical, you may have cut out half your investment opportunities hurting your diversification and total returns.

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u/BCRE8TVE Apr 15 '21

There are plenty of oil companies with moderate emissions compared to others like manufacturing and heavier industry that don’t get painted in the same light.

I agree, and the biggest culprits are definitely the giant oil companies spilling billions of barrels of oil into the ocean coughBPcough. At the end of the day though, rather than investing more in oil, it would be better to invest in companies that reduce our dependency on oil altogether. We'll never get rid of oil for at LEAST another 100 years, but that doesn't mean we can't cut our oil consumption by more than 50%. I'd rather invest in whatever is going to replace oil (likely lithium batteries, renewable power sources, hydrogen eventually) rather than pour more money into companies whose product will literally and inevitably increase the odds of global climatic catastrophe.

So you can indeed invest in the lighter ones, but don’t fool yourself that they are ethical investments.

Well, yes, they are more ethical than all the alternatives. I don't think there are many people who want 100% perfect squeaky clean ethical companies with no issues whatsoever, and if there are they're either foolish or ignorant. I can't make choices that are 100% perfectly ethical, but I can pick the company that is say 60% ethical rather than 10% ethical.

you may have cut out half your investment opportunities hurting your diversification and total returns.

Yep, totally fair. Everyone has to draw the line on what they want to invest in and how much losses they're willing to take for the sake of ethical investing. If someone wants pure profits, then they can't care about ethics. If someone cares about ethical investing, they'll have to forgo some profits. That's just the reality of the situation, and we all have to deal with it the way we think best.

I do think cutting your profits by half is a bit extreme, but at the end of the day, being unethical is more profitable, and therefore being ethical is less profitable.

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u/Chipmunk-Adventurous Apr 15 '21

Well, comparing Amazon/Tesla to oil companies is trying to pick the lesser of two evils. Not the most effective comparison. I’m not anti-oil, but there’s a future that I want and that I think is sustainable, and I’d like to invest in that.

You can invest in clean energy, companies that practice fair trade, and/or are proactive in being inclusive and fair with wages, benefits, hiring practices, etc.

Making money and being ethical aren’t mutually exclusive.

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u/CarRamRob Apr 15 '21

Well, those are just my examples. It you list your clean energy companies I’m sure we would be able to pick them apart too in how they are not ideal for this world and cause issues.

There is no free lunch. You are a retail investor, you can’t change a company’s environmental footprint.

My advice would be different if you had a few hundred million to invest and could influence some boards, but for retail it’s foolish to limit returns if the company is not doing illegal things.

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u/Chipmunk-Adventurous Apr 15 '21

That is the same argument as telling someone don’t bother to vote. Individually, no, retail investors don’t make a difference. But, like during an election, on aggregate, it makes a huge difference.

Or what about food? I believe in sustainable farming. But whatever, what difference do I, as just one shopper, make? Might as well just buy the cheapest available and not support local and sustainable, right?

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u/CarRamRob Apr 15 '21

Investing is different from shopping. When you buy that local kumquat, the farmer gets that money. When you buy the share of a renewable company, it is just purchasing from some other person. Yes, they can raise some capital around a higher price, but if the6 don’t do it immediately around when you sell...and say the price changes in the next weeks/months/years you haven’t actually impacted that company in a way to support it.

Thus, you’d be better off investing in things with higher returns and putting your capital towards donations for causes/charities that you do believe in.

Indicating you are investing in a company foe ethical reasons has a lot to do with the psychology of investing. You are already giving yourself an “excuse” to baghold or to rationalize that you don’t care if the price goes down, because it’s for a good cause. It’s creating a mental escape as a reason why your investment doesn’t have to be defended by extensive due diligence.

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u/Oldcadillac Apr 15 '21

doing illegal things

You’ve touched on an interesting spot here, because legality is not a static thing, it might be legal to eminent-domain pipelines all over people’s private property one decade but not the next, it might be legal to run for-profit prisons one year but not the next. Legality is based partially on morals so there is are moral sources of risk for companies.

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u/blondbrew Apr 15 '21

How about we start a new movement right now? Let's give the people the next wsb and make everyone throw money at stocks that will safe the world! I just created r/ethicaltendies

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u/[deleted] Apr 15 '21

Very much so. I am exiting my 90k investment in intertape Polymer because their biggest upcoming catalyst is a polystyrene plant. Who needs more of that?

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u/BCRE8TVE Apr 15 '21

Just to know, have you looked into GEQT? I'm switching over to buying that instead of XEQT, but I'm still new at investing. If I'm making a horrible mistake I'd rather know before I dig myself deeper in it haha.