The Heart of Money: I don’t want to own “America” right now

Reader question: I don’t want to own “America” right now. I don’t want to profit from killing people, destroying jobs in other countries, and ruining lives through a system that places profits over people and the planet. I have a 401(k) and an IRA filled with mutual funds. I really don’t even care if I make less money by being conscientious. My advisor says he has other clients who are “that way.” I don’t think he gets me. Any advice?

Paul Sutherland: “Good on you!” as my friends at Australia Ethical Investment Company would say. My friends would also point out that you don’t need to sacrifice returns to invest in conscientious companies—and they prove the point with statistics from Morningstar and other investment performance analyzers. So it is not going to cost you to do the right thing. But that’s not the point of your question. The point is to feel good about how your money works for you.

In a utopian world, we would invest, knowing that:

1. Our money does no harm.
2. Our money does not support people or organizations that are not good for society.
3. Our money helps improve how companies interact with customers and the world around them.
4. Our money will make a reasonable return.
5. This is doable, and it’s a powerful form of spiritual practice. But it’s not simple. I will give you a few things to think about as you get started.

First, know what companies you own—and think deeply about what they do. For example, let’s say you own a pharmaceutical company through your mutual fund. The company spent many years and hundreds of millions of dollars to create a successful cancer drug, and now it charges $100,000 for a cure. Should a cancer patient be expected to mortgage their house and be grateful to be alive? What about patients who have no home to mortgage, no way of coming up with $100,000? Should those patients be left to die?

Do you want to profit from a company that saves lives—but shuns those who can’t pay?

The drug company says that insurers or the government should pay them the $100,000 to save their insured or their citizen. But what if the patient smoked and ate fast food every day? Or was a yoga-practicing vegetarian? Could the patient have chosen his or her parents more thoughtfully?

People get mad at drug companies, insurers, and government regulations that make this drug pricing/access to care issue seem so unfair. But the hard question is, How do we spread this personal/societal/commons responsibility around?

Second, go through your portfolio, which is detailed in your mutual fund reports, and think about how you feel about each of your investments. Then write to the board of directors and tell them how they could better reflect your values. Writing letters is an active way of helping to improve company behavior, and at the same time you will be clarifying your own values, choices, and responsibilities.

Many years ago, a friend of mine said he would not own stocks of any sort, saying it was unethical, greedy, and a feature of corporate America he did not want to support. He said his investments were in U.S. bonds and bank deposits. I replied, “You don’t want to profit from bomb manufacturers, but you will invest in the government that buys the product? So guns kill—people don’t?” I asked him whether he thought it was ethical for the bank to pay nothing on checking account balances and then lend the money to people who make stuff he thought was unethical.

No one is perfect. And no government or company or charity is, either. That said, our investments are a reflection of our values, and we can use them to nudge companies closer to our framing of ethics and good business. We can avoid profiting from companies that create goods that benefit no one except themselves: Guns, tobacco, alcohol, gambling, coal, and pornography are easy picks. Meanwhile, we can look for companies that are doing good, in a good way.

There is no saint without a past nor a sinner without a future. So I would tell your advisor to get with it—or else you will find an ethical, values-driven, experienced, fee-only advisor who gets you.