Corporate Responsibility Mondays

Well I know this will sadden all of you who love this daily dose of negativity. But for various reasons . . . this will be the last week of this series for a bit. I think in it’s place I’ll talk about something happy like puppies. Or what I ate for breakfast. Because those things are constructive. Sarcasm implied.

With that being said . . . Ariah and I will be discussing socially responsible investing. Ariah’s thoughts can be found here where he discusses some of the tension that exists within such an ambiguous area like “socially responsible investing”, as well as suggesting some positive investment strategies.

This is a rather tricky subject. One that Ariah highlights very nicely. So I’ll leave it to him to explain the difficulty in selecting a “socialy responsible investment”. But it’s extremely difficult simply because there are not necessarily clear cut lines. Black and white demarcations between “good” and “bad”. Even those that are considered “good” at some point along the social line do things corporately that have a negative effect on the environment, labor, or ethics.

But in the wise words of Nicholas Fielder – something is better than nothing.

The thing that makes investing such a difficult topic is that most of us don’t have enough money or experience to invest with single stocks (companies). We tend to have our retirements tied up in mutual funds and other group investments. So while it is easy to avoid investing in singular companies like Wal-Mart and Coca-Cola . . . it’s extremely time consuming and difficult to sort and sift through group funds.

For example . . . let’s take a look at Playboy. A company that most people would agree is probably not the pillar of family values and ethical behavior. Although I hear the articles are good. Take a look at their shareholder breakdown. Wells Fargo owns 2.6 million shares of stock making it the company with the 2nd highest percentage of stock in Playboy. And when it comes to mutual funds . . . Fidelity’s Small Cap Fund owns 2.4 million shares of stock (which amounts to 27 million dollars).

Now I could probably walk up and down the aisles of my old conservative church. And 99% of the people would be red in the face with anger if I said we should support Playboy. But if I went up and down the aisle and found all the people who had an investment in Fidelity’s Small Cap Fund . . . for most this would be the first time they had heard anything about it . . . and for others they would justify it somehow by extolling the virtues of capitalism.

The point is if you wouldn’t support Playboy as a company by buying their magazines and videos . . . then why would you have a portion of your investments going to a fund or company that owns a substantial percentage of the company? Or better yet 65% of the company is owned by mutual funds. With over 15% of those being owned by Fidelity. So I don’t know what the math is on 15% of 65% (a little help Eric . . .) but it’s probably close to 5% of the company. So technically you have a 5% investment in Playboy.

Do you see how quickly it starts to get tricky? You can easily see how blind many of us (including myself) make our decisions.

And I guess that’s the point of this whole little series. That started with ME wanting to find out where my money was going with the companies that I regularly support. Needless to say it was eye-opening for me.

So despite the perceived negativity that some have found . . . I hope it was an informative and challenging look at what happens when we spend our money blindly. Bottomline . . . we shouldn’t support things with our money that Jesus wouldn’t support with his. And to be even more blunt . . . we should deliberately subvert those things that he wouldn’t support, flipping over the tables if need be.

I want to thank Ariah for taking the time each week to post a topic that provides hopeful alternatives. That is a much more difficult task than me taking one company and ripping all of it’s bad virtues. So for that I am thankful to Ariah for his time and insight.

P.S. What do you want to be that my spam count will go through the roof now that I’ve used the word Playboy within a post?

[tags]Playboy, Socially Responsible Investing, SRI, Fidelity, Wells Fargo, Corporate Responsibility[/tags]