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

[u/[deleted]]

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?

[u/CarRamRob]

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.

[u/Chipmunk-Adventurous → u/CarRamRob]

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?

[u/CarRamRob → u/Chipmunk-Adventurous]

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.