I’m not very comfortable with the word ‘ethical’, particularly when used beside the word ‘corporation’? A corporation is a thing, in this case a legal structure, so how can it be classified as ethical or not?

So an oil company, at its essence simply an owner or tenant on land where oil is found, is not inherently unethical. It’s the way they get that oil from the ground to your fuel tank that can be put on an ethical scale. What efforts does the corporation make to remediate environmental disruption? How are employees and communities at the epicentre of these activities being treated? Is the result of these operations a net benefit to broader society?

When someone asks me “What makes this an ethical portfolio”, I’ll ask them if they have a couple of hours in which to discuss the subject further. It’s not an easy answer, and not simply summed up by saying “these companies are all trying to be more sustainable”, or some similar platitude.

One way I approach this question with a client is to find some ground where we might agree that a company’s actions could not be described as unethical. That is, these companies may or may not be making the world a better place, but on balance, their negative impact on society may be negligible. Here are three examples in the fields of media, entertainment and technology.

CINEPLEX GALAXY INCOME FUND (CGX.UN-TSX) A couple of years back I took my niece and two of her friends to the movies in Toronto. I don’t remember the title, but I do remember coming out about $150 lighter. Once you’re inside the theatre, Cineplex has figured out a bunch of ways to remove bills from your wallet. It was like a midway at the exhibition inside…food, games, sport facilities, they had it all. It was a memorable afternoon of fun. Their unit trust pays a healthy 6% dividend.

SHAW COMMUNICATIONS (SJR.B-TSX) I pay these guys $115 a month to be connected. That’s about $1,400 a year, and if I survive another 30 years that comes to…phew, $42,000! No wonder their customer service is so good. That’s a whole lot of money at stake. Shares in Shaw pay a 4% dividend, and if the economy turns bad, how many people do you think will be permanently giving up their cable and internet connection?

APPLE (AAPL-NASDAQ) I have Apple-envy. Don’t think I need treatment yet, but I sure would like one of those snazzy I-things, and their computers make my PC look tired and old and cranky. But stop showing me your Mac Air, or 4G I-Phone, or other Apple gizmo, ok? My cell phone contract is up next month, and I don’t really need a new one. Apple shares traded for more than 20 years in the $10 range. Today a single share trades for over $300!

These three companies demonstrate an old adage in respect to investing. If you want to buy shares in a company, it’s a good idea to be their customer first. It’s a great way to do frontline research on behalf of your RRSP.

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