Socially Responsible Investing (SRI)

One of the biggest ways in which public perception has changed business and industry is through socially responsible investment (SRI) funds. In the business startup world, some investors with strong ethical compasses have chosen to restrict the types of businesses in which they are willing to invest with their capital (Sparkes & Cowton, 2004). Some of these restricted categories aremore or less unanimouslyseen as immoral industries. Others, however, are more controversial.

ALCOHOL

Obviously, not all people abuse alcohol, and not all people view producers of alcohol as immoral. However, many SRI funds exclude alcohol companies because of the tragic effects that alcohol has in contexts such as drunk driving, etc.

TOBACCO

Virtually the same arguments that apply to alcohol apply to tobacco, except that tobacco is vilified for its unmistakable role in cancers, emphysema, and early mortality. Thus, SRI funds typically avoid tobacco companies as well.

GAMBLING

Like alcohol, not all people have gambling problems or see any ethical issue with the gambling industry. However, we do know that gambling is another addictive behavior, and for this reason, casinos are typically excluded from SRI funds.

WEAPONS

Firearms are a heated subject withall ofthe current political debate surrounding Second Amendment rights and the best ways to address gun violence in America. However, because of the enormously large rates of violent gun-related crime in the United States (compared to other civilized nations), weapons are a non-sequitur for SRI funds.

NUCLEAR POWER

This is perhaps the most controversial category of all. The intentions of nuclear energy companies don't inevitably entail harm to anyone, and in fact, these companies only seek to provide sustainable,environmentally-friendlypower to the societies they serve. However, given the tremendous risk that nuclear power plants carry---realized in places such as Chernobyl and Fukushima---SRI funds have generally blacklisted these companies.

ILLEGALITIES AND ILL-REPUTE

Above and beyond those categories already discussed, it goes without saying that any companies which are found guilty of illegal conduct such as collusion, price fixing, fraud, etc., or disreputable behavior such poor product safety, unfair labor practices, environmental pollution, etc. will be excluded from SRI fund eligibility, notwithstanding the industries in which they operate.

1. Consider the list of industries above in the content in which SRI funds will not invest. Are there any on the list with which you would take issue? If you had to make an argument for the ethical premiseof one of these industries (from the list above), which one would you pick and what would your argumentbe?

1. Consider the principle of profit maximization and the notion that businesses shouldn't be obligated to do anything but make money. Do you think businesses have an obligation to help support society and the natural environment? Considering how poor businesses are at self-regulation (evidence of this is everywhere), should the government step in and require businesses by law to behave in certain ways (e.g.environmental and societal welfare laws)? Why or why not?