Investing responsibly is investing wisely
By Frank Jasper, Director
07 June, 2017
Imagine a company that dumps 200,000 tons of waste into its local rivers every day, systematically bribes local police forces, and shows utter disregard for the lives of the indigenous people who live near it.
Not only is this a bad investment — abusing your stakeholders is rarely profitable in the long term — you wouldn't even want to be associated with it.
Responsible investing involves avoiding these sorts of companies — selecting investments that generate sound returns in a way that does not cause widespread harm to society or the environment.
Fisher Funds is committed to investing your money responsibly — ensuring we all feel comfortable with the investments you own.
We look at responsible investing in two ways — avoiding the bad and embracing the good.
"Avoiding the bad" ensures we don't invest in companies that are poor performers from an environmental, social or corporate governance (ESG) perspective.
We have, for some time, not invested in the tobacco industry or in companies that manufacture weapons that cause indiscriminate and disproportionate harm. The rationale for these exclusions is simple: these industries cause only harm and have no redeeming benefits. This includes not having investments in companies like Textron which makes land mines, but also more well-known companies like Boeing, which makes components used to produce nuclear weapons.
We have decided to add thermal coal producers to our list of product exclusions. This is because of the impact of thermal coal on man-made climate change.
The second group of exclusions is for those companies that have exhibited widespread and severe corporate misbehavior.
Freeport McMoran, the company referred to in the introduction, is an example of a company on our conduct exclusion list. Freeport has faced serious criticism over its environmental practices at its Grasberg gold and copper mine in West Papua, Indonesia. The company has also been involved in widespread human rights abuses of the local indigenous populations.
For us, responsible investing is more than just excluding the worst companies. Whenever we look at a company, we look at its financial performance, its strategy and the experience of its management team. We also explicitly consider its performance through a responsible investing lens. This involves looking at its treatment of stakeholders, the environment and the sustainability of its business model.
Considering these factors in addition to the traditional financial ones gives us a greater insight into the quality of a company and makes us better investors. You will be hearing more from us about our responsible investing policy and how we're applying it. In the meantime, know that we are committed to investing your money responsibly; and therefore wisely.
Read more on our responsible investing approach.