“What are your thoughts on modern slavery? How about the treatment of cows in leather factories in Bangladesh? Animal testing? Fracking for natural gas? Biomass as an alternative to coal? Chinese air pollution laws? The manufacture of arms? Production of formula milk in third world countries? The use of pesticides in food production? The genetic modification of vegetables?”
“What you got? Come on! Think about it.”
“I don’t know really”.
“You don’t know?”
“People are dying. Animals too. Lots of them, painfully, preventably. The world is choking to death and governments let it happen. Companies WANT it to happen. What about you? What have you got to say about that? Hey? Hey?”
“Just leave me alone!”
This is what it can sometimes feel like when we are asked to consider our ethical views on something. It can feel impossible, defeating, depressing. Like you, I don’t have the answers to a lot of the world’s hardest but also most urgent ethical dilemmas. I don’t know, for example, how much rich countries should pay to poor countries to help them prevent and mitigate climate change. No one does, and that’s why COP21 was unable to reach a binding agreement between every country in the world. Ethics in action = disagreement.
But does that mean we should give up trying? No!
Because what I do know is this: I know things aren’t right, I want them to be better and I’d like to make some contribution, however meagre, to making that happen.
When we created good-with-money.com, me and Lisa didn’t have our ethical spiel down pat. We still don’t. We know we care about sustainability and helping disadvantaged people to have more hopeful lives, but if you asked me if, as Energy Minister, I would be able to say no to fracking for shale gas, meanwhile knowingly condemning the country to short-term blackouts, I would find it hard to know.
Being good with your money isn’t easy. The effort required to make some of the changes to your finances – current accounts, pensions, even insurance policies, can feel harder than getting out of bed on a grey December Sunday, and the reward for the world too small to justify.
But just being aware that you can do better, at little to no extra cost to yourself financially (or you could even be better off financially over the long term), is the first part of the challenge. Then applying that awareness the next time you make a financial decision is the next step. This might mean simply choosing the Building Society two-year fixed rate mortgage at 1.69 per cent over the one from a Big Four bank, or it might be a much more in-depth switch of all of your former occupational pension schemes to a sustainable SIPP portfolio.
You don’t have to know what you think about every single moral dilemma the world faces to make these changes – you just have to have a vague sense of wanting your cash to do a bit better without having to go on endless half marathons to raise more of it for charity.
You should of course give to charity if you want to. But (and this may be controversial), there’s no point giving to the Red Cross if all of your investments are in emerging market commodities funds.
Having a current account with HSBC doesn’t make you a bad person. Nor does keeping all of your cash with the Co-op grant you a place in heaven (as it’s former rogue chief exec might have thought). But being aware of better alternatives and having on your to-do list: “switch current account to Co-op or Nationwide”, or “Fill in Share Action form on my pension provider” are certainly very decent first steps.
Because the good news is there are lots of people thinking very hard about all of these moral dilemmas on our behalves.
Fund managers with Environmental, Social, Governance mandates have to think about this stuff daily. Often they have to make compromises they might not like to make. But with their billions of assets under management, they are also in the best position to put pressure on the companies they invest in to improve what they do. When they say jump, global, multi-billion pound businesses who can ignore customers and governments, tend to say: “How high?”
It is the asset management industry that holds the key to all this. If all asset managers got down with ESG, Lisa and I wouldn’t have anything to do anymore, as all of the financial services products you buy and invest in would then also become more ethical by default. All money would be good. Imagine that.
But we aren’t there yet. It is still the case that bad stuff gets funded by people who want to make as much money as possible in as short a time as possible. Consequently, even when you try to do the right thing, the world being as interconnected as it is, somewhere down any supply chain there will be some dodgy deal, misuse of materials, or unfair pay package. Sadly even behind products that are labelled as “green” or “ethical”. It can be hard, sometimes, to find a clean gold nugget in a pile of shit (what do you mean you haven’t tried?). One former head of ethics at the Co-op told me: “You can be on the phone at quarter past midnight trying to work out whether the presence of that farm in the supply chain of one of your businesses makes it unethical and you have to try and make a call on it when it may be far from clear.”
None of us are perfect. The world isn’t perfect. Companies aren’t perfect. But the great news is that some are genuinely trying to be better – to give that gold nugget a good wash. Hold the cynicism, demand transparency, keep your bullshit radar handy (if you haven’t got one, just ask us), and next time you make a financial decision, make it a good one.