If someone shops around and buys the most fuel-efficient green vehicle they can find, I applaud that and they probably sleep better at night. (...). The greener thing to do would be to give up owning a car entirely.
So... if it's really not black and white for you ... then it would mean that you *should* applaud that person for buying the greener choice. So yes, I think that if you need to buy a car, then do buy the greener one. Not black, not white, but a better shade of grey.
Same for the stock market. I see no problem with owning part of companies. Companies make things, services, experiences. Companies can make things that help people live a good life (including a good or maybe even better life in the future). Companies can also make things/services that make life worse. Let's own a part of the companies that make life better - or, given the fact that sometimes things aren't this black and white, let's aim to own the better companies out there, and let's aim to not partake in the worst offenders.
I agree choosing the better options should be applauded (I drive a hybrid myself). I'm sorry if I did not make that clear. The stock market is a muddled affair though, which is what makes me think it's a little harder to decide what's 'best' when it comes to investing.
If you judge by a person's lifetime of effort, then getting to FI the fastest to be able to live in a way that has the biggest impact will probably be the best approach for someone younger. I'm not saying that a person should disregard all feelings about a company or fund, but micromanaging it based on personal feelings is probably a smaller ROI than putting that effort into ERE-type activities.
There's also the question of how to judge a company. Should they be judged solely based on product? That's typically how it's done -- by avoiding companies that produce nuclear power or petroleum products or similar. But what if a company produces something greener, but then treats it's workers terribly or pollutes the environment or avoids any social engagement? What if a not-so-green green company gives a lot back to the community or has a larger percentage of female or minority leaders? Does the way the company is run matter more? The same?
There's also the question of the financial industry in general. Do I want to invest in ETFs if I think they've had a negative impact? Or what about a companies like TIAA-CREF or Wells Fargo? They may offer appealing socially-conscious funds with good returns, but their business practices are suspect at best.
I guess my point is that I think people should choose their investments based on a number of factors, including taking into account how they are investing in the companies they choose. I agree that in our own lives, we should strive to make the most conscientious choices. It's much easier to do that though if we can set up our lives in a way that gives us better choices, if that makes sense, and crossing the ERE-threshold as soon as possible helps.
The topic might be a bit old, but for me it stayed relevant since I started reading the ERE blog and in the forums. To be honest even before that but my investing habits changed a bit when I started reading here.
I'm still looking for an ETF that offers a way to invest as socially responsible as possible. I do not really want to stir up another discussion about what is socially responsible and what not. There is probably no real agreement on that. Only a different amount of the population agreeing on what is socially responsible and what. You will probably find more people agreeing on not supporting child labor vs. arguing if gambling/tobacco is a bad thing or not...
I had a very interesting discussion with the CFO of a bigger foundation quite some years back and he told me that all they employed as guideline was to stick to the blacklist(s) of the Norwegian state fund
The fund generated roughly 6% per year over the last 20 years. It tries to actively engage with the companies it invests in. However, you can't invest into it as private (non-Norwegian) person. As long as I was investing completely active that was not that big of a problem, as their black list is published (or at least it was some years ago). But when I started to turn to index funds I searched quite some time to find a fund which tries to mimic this state fund - at least on the stock market side. I did not find one, if someone knows of one I'd be happy to know about.
I looked quite a while around and then settled with an MSCI World SRI fund as it offered other criteria I looked for (size, full replication) but I'm still looking for a way to replicate (as good as possible) the Norwegian state fund.
