Unethical investment

Nature

Unethical investment refers to the practice of allocating financial resources to ventures that engage in morally questionable or harmful activities. This includes industries such as tobacco, fossil fuels, arms manufacturing, and companies with poor labor practices or environmental records. Such investments often prioritize profit over social responsibility, leading to negative consequences for communities, ecosystems, and global well-being. The growing awareness of ethical considerations in finance has prompted calls for responsible investing, where investors seek to align their portfolios with values that promote sustainability, equity, and social justice, thereby addressing the challenges posed by unethical investment practices.

Incidence

Through the 1970s and the 1980s, any form of investment in South Africa was considered unethical. This ban became questionable in 1993. Attention has shifted to China, because of its poor human rights record. China and many emerging markets fall far short of such ethical ideals as equal employment opportunities, the right to organize trade unions, domestic laws on minimum wage and maximum hours of work, anti-pollution controls, and the like, especially with the use of prisoners to benefit economic production. Concerns have also been expressed with regard to logging companies operating in Indonesia and Malaysia. In the case of Chile there is concern about the fact that 10% of copper sales go directly to the military which continued in 1993 to have an inordinate influence over the government and human rights issues.

Claim

Just about every corporation deals with another (often a bank) that makes money from some undesirable activity.

Counter-claim

Whether an investment is judged ethical or not usually depends on the investor's liberal prejudices. Such distinctions are often simply a matter of conscience salving.