Nov 14 2011

Rothkopf: socially responsible investors shun gambling. So hit the banks

Posted by: Nick Shaxson in: Thoughts

David Rothkopf, a well known U.S. commentator, has an interesting piece in the Financial Times looking at the Occupy movement. Its last line summarises it:

The conclusion is inescapable: one of the best ways to take Occupy Wall Street to the next level would be to hit its targets right where they live – in their wallets.

So how would Rothkopf’s proposal work?

Anti-Wall Street protesters might therefore consider giving the banks and other corporate malefactors a taste of their own medicine. They could turn to the growing community of large institutional investors – including public funds, unions and sovereign wealth funds – that have embraced the idea of socially responsible investing (SRI) and push for a broadening of that concept to include banks whose practices are damaging to society.

Well, the question of what demands Occupy should have (and whether, or up to what point, they should have demands) is still rather up in the air. But in any case, Rothkopf’s is a decent idea. Some people sniff at SRI as an ineffectual public relations exercise – and there is perhaps something to this, though only up to a point. SRI increasingly can make a difference – and it can help catalyse wider societal changes too (as it rides on the waves of those changes too). Rothkopf notes that the number of investors who have embraced SRI is estimated to have grown from a couple of hundred in the mid-1990s to more than 2,100 today and include a range of true global giants from California’s $400bn pension fund Calpers to Norway’s mighty oil fund.

“Funds regularly screen out investments associated with perceived negative social consequences, such as alcohol, tobacco, gambling, nuclear energy, military equipment or polluters.

Unethical acts? Gambling? These already seem to fit some of our larger and more reckless financial institutions. . . . Is it socially responsible to invest in the companies who have turned markets into casinos?

Of course it isn’t.”

Indeed. But don’t just stop there. Bring tax into the social responsibility debate too. That is another elephant in the room. Read all about that here.

These kinds of initiatives on their own can’t transform the banking system. But they would certainly help focus minds, and catalyse debate.

Photo hat tip: Nick Francis, who noticed the book this Occupy protester was reading.

one comment

Ron Robins 11th November, 2011 3.39 pm

I’m glad to see you brought-up the subject of socially responsible investing.

Surveys all-over-the-world show that most investors want to invest in socially responsible companies and don’t want their investments being the cause of grief to others. Then since so many of our core values are alike — and are supportive of higher ideals — that in the long run, only companies employing these higher values will likely prosper.

I’ve been following socially responsible investing for some forty years.

In 2003, I founded a site to educate investors about ethical/socially responsible investing. It’s now one of the foremost global sites on this topic.

It covers the latest related global news, research, books, links, articles, etc., and according to Google rankings is one of the world’s most popular on this subject. It’s at http://investingforthesoul.com/

Best wishes, Ron

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