I know thoughts on making ethical investments get shat on a lot on this sub, but consider the following scenario:
All firms create value for consumers in a society, and the exchange of that value is returned to shareholders. The act of producing some goods and services and supplying them to the markets has an externality to society that is positive or negative.
Let's say I'm a fund manager for a social index fund. My goal is to take a regular index fund and rebalance it to some degree so that companies that produce social good are weighted heavier and companies that produce social bad are weighted lighter. OR at the very least, you want to put some guardrails so that companies that produce social bad are divested from. In a perfect world, this fund would trade higher than we would otherwise expect based on risk/return because some element of the social return that didn't show up on the balance sheet would matter to investors, who would pay a premium to know they weren't contributing to social harm. (All this is admittedly really hard to quantify.)
My question is: which firms/sectors/business practices produce the biggest externalities in either a good or bad direction?
Submitted January 07, 2018 at 06:41PM by ragingdobs http://ift.tt/2F9Tvod
