In recent years there was a spike in interest on ethical investing, which comes in different names and sub-forms such as sustainable investing, ESG (environmental, social and governance) investing, green investing, etc. Many institutions offered mutual funds and exchange traded funds (ETFs) focused on such investment principles, examples of which would be the iShares Global Clean Energy ETF (ticker: ICLN) and the Lion-OCBC Securities Singapore Low Carbon ETF (ticker: ESG.SI) in our Bedokian Portfolio.
Although there are set standards on what ethical investing is, based on quantifiable numbers such as ESG scores, or industries directly or indirectly related to the cause (like our ICLN for green energy and ESG.SI for low carbon), ethics overall is still very much open to interpretation and subjectivity. While there are general beliefs in what “ethical” means, like not investing into tobacco stocks as an illustration, it would be surprising to find out otherwise if one digs deep enough. An ex-colleague of mine refused to invest in real estate investment trusts (REITs), on the rationale that “bad landlords” increasing rents would contribute eventually to increasing prices and costs of living (it is his viewpoint, so please do not complain on me for this). Another anecdotal story (a friend of a friend) refrained from buying large cap stocks due to the “bad corporations” image (do not flame me for this, too).
As what some said, the best investments are the ones that could make you sleep well at night. Not only this adage applies to the financially healthy companies, but also those whose businesses benefit many, i.e., making money in a “cleaner” sense (quotes emphasized by me as this is subjective).
In the Bedokian’s opinion, if the investible assets and financial instruments are open and legal, it is up to the individual investor’s views and values on determining what ethical means to them.
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