Take it from someone who has focused on the subject for the last decade and then some. If you want to be a ‘socially responsible’ investor these days, there is little reason to feel enthused by what the financial industry has to offer.
BP, for example, has over the years appeared on many so-called ‘ethical’ investment lists. Why? Probably because they talked a great game about wind and solar and ‘Beyond Petroleum’, much better than Exxon at least. But the talk has since been exposed as mostly hot air.
Similarly, Suncor’s oil sands operation is a staple in many Canadian mutual funds that label themselves ‘socially responsible’. So are Barrick Gold and Enbridge, both of whom are facing intense pressure to live up to environmental and social responsibilities.
To be honest with you, I don’t think those companies are in the forefront of a sustainable future, and neither do most of my clients. They’re forced to behave in a more sustainable manner by the critical eye of public opinion, and perhaps that’s a step forward in the evolution of capitalism. But we clearly have a long way to go in balancing social and environmental considerations with the profit motive.
Thus the challenge for investors who want to own shares in companies that aren’t fouling our future can be complex and daunting. I have my own list of about 40 companies that don’t cause me to lose sleep at night thinking about dead birds, or slave labour, or nuclear meltdowns. I’ll share it with you.
None of these companies are perfect corporate citizens. One could have a raging debate about the inputs, operations and stuff these companies produce. Some that have made my list might not make yours. Some are highly speculative investments, and some have been recession-proof dividend-payers.
So here are three I’ve followed for years now. Next month I’ll report on three more. For those who don’t want to wait, give me a call or email and I’ll share the full list with you.
DOREL (DII.B-TSX) This 40-year old Montreal firm makes furniture, baby stuff, and bicycles. I’m not too excited by their furniture, but I own one of their bikes. Dorel sells a lot of them, more than anyone else in North America in fact. I love my bike, I’d recommend it to anyone, and I hope they sell a zillion more. Shareholders are receiving a tidy little dividend while the business blooms.
KONINKLIJKE PHILIPS (PHG-NYSE) You know these guys, they’ve been making those crappy old incandescent light bulbs since forever. Those bulbs are not long for this planet, the compact fluorescent has gained a lot of traction, but it’s their LED bulbs that have the brightest future. They’re still expensive, but last much longer and consume a tiny fraction of the energy used by the old ones. That’s got to be a good idea for a carbon-constrained world.
GOOGLE (GOOG-Nasdaq) What’s not to love about Google? You can be enlightened and informed by using their services, they are advocates of open and free speech, and you don’t have to burn fossil fuels to enjoy what they offer. They also own YouTube, which makes network television look like three-day old leftovers, and a host of other very cool and functional toys and tools.
From a solely financial perspective, you could have made a small fortune by purchasing these shares when they were first offered to the public. It’s also possible to have shown a loss over shorter time frames. So please, don’t jump into any of this without understanding the risks, or your own individual predilection towards being a share owner.
And one final thought given a shaky world economy. If economic growth stagnates and falters, I still expect to be using a couple of light bulbs, a Google search function, and my bicycle.