stolinski Effective altruism, My investments, My story

It’s not all about profit (part two)

The second attitude (part one here) I seem to come up against a lot regarding ethical investment is a nihilistic argument with two prongs.

One is represented mainly by my father (hi dad!) who takes the view that he wants to double his money as quickly as possible and if everything is legal then where on earth is the problem? Further, he firmly believes in survival of the fittest.

I actually find this view quite offensive, even though I would imagine the majority of people would share it. I feel that anyone who has enough money to invest is not necessarily amongst the fittest in evolution terms but definitely privileged in many ways. I don’t want to lose money but I would rather everyone got rich, not me at the expense of others. There is enough for us all! If the game of capitalism results in winners and losers then I want to change the game. I believe in abundance, not poverty.

The rules of the game have been drawn up wrong, I truly believe we can all win. Or if not all win, maybe that’s too much, but at least ensure that no-one is hungry and everyone is housed. For fuck’s sake it’s 2020 and we can’t even do that!?

The second prong says that buying/selling stocks in a company doesn’t really affect them that much anyway, you can’t cause direct change by buying their stuff instead. I understand this argument, but i still don’t really get this, it’s just as ridiculous to me as Marxists telling me they buy coffee at Starbucks rather than the local cafe because we are powerless in the face of multinational corporations and it simply doesn’t matter. Yup rather nihilist. I would much rather put my money where my mouth is and therefore this argument simply passes me by for the most part. Not thinking only about profit means that i can invest my money where i want it to be and not be ruled by the market. I am generally quite nihilistic in the sense of thinking we are all fucked, but as the ship goes down I’d still like to be spreading my money so that more people than ME ME ME benefit.

stolinski News

Investors unwilling to sacrifice profit for ethics

Francis Klonowski, who runs Klonowski and Co, an advice firm in Leeds, said in 20 years he has only ever had two clients with an interest in SRI investments and both of those clients sold the investments at a time when they performed badly.

LOL this is what we are up against…

Financial Crimes

stolinski Fund Review, My investments

Fund review – Jupiter Responsible Income

Jupiter Responsible Income

I have some holdings in this fund through a SIPP which i set up about ten years ago and then basically forgot about since I struggled to find anything really great and settled on this one. It is/was hard and dispiriting trying to find truly ethical stuff. I remember at that time not being able to find anything particularly hard ethical (on my requirements) that i could put in a SIPP. Nowadays i think things are improving and so i’m already thinking before i check this out that i will want to transfer the SIPP.

Let’s have a look.

Objective (pdf): The Fund’s objective is to provide income and long-term capital growth through investment primarily in UK equities. The Fund’s investment policy is to attain its objective by investing primarily in the UK in a portfolio of companies considered by the Fund Manager to be responding positively and profiting from its challenges of environmental sustainability or are making a positive commitment of social well-being.

Top 10 Holdings

1 AVIVA
2 GLAXOSMITHKLINE – tests on animals
3 LLOYDS BANKING GROUP PLC – arms / tax evasion / PPI scams / Libor manipulations – pick your controversy
4 TESCO CORP – destroys local shops
5 HSBC HLDGS – the worst high street bank?
6 VODAFONE GROUP
7 BARCLAYS PLC – terrible bank, so many scandals
8 RELX NV
9 PRUDENTIAL PLC
10 MICRO FOCUS INTERNATIONAL

Yup. Let’s not go further. I don’t even need to do the research, I know the crimes of enough of these companies off the top of my head. If you want more info check the links. This fund shouldn’t even pass a negative screening.

Ah! Although i decided i should check the other companies, and funnily enough Aviva is getting some good feedback for taking some actually ethical steps. This in no way makes them hard ethical though.

VERDICT

Nope!! I’ll be moving my money away ASAP, i just need to finish the research on where to go. There’s nothing responsible about these companies, unless you agree with this Milton Friedman quote:

There is one, and only one, social responsibility of business: to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

Perhaps Aviva is a cut above the rest.

stolinski Tips

Don’t Bank on the Bomb

This is a really great site which describes itself as “the only regularly published source of information on the private companies involved in the production of nuclear weapons and their financiers.” Amazing! there’s a load of useful information, including the top10 investors in nuclear industry.

And i found this page interesting:

Don’t Bank on the bomb identifies the following companies as producers of key components for the UK nuclear weapons arsenal:

  • Aerojet Rocketdyne (United States)
  • BAE Systems (United Kingdom)
  • Boeing (United States)
  • General Dynamics (United States)
  • Honeywell International (United States)
  • Jacobs Engineering (United States)
  • Lockheed Martin (United States)
  • Moog (United States)
  • Northrop Grumman (United States) (which has acquired Orbital ATK)
  • Serco (United Kingdom)
stolinski Effective altruism

It’s not all about profit (part one)

In this post I’d like to address two attitudes which I come up against frequently in discussions surrounding green or ethical investment… actually having now written part one about the first attitude, the second seems worthy of a post of its own (and who knows, maybe some discussion) so I’ll put that in part two.

First, I want to discuss the developed utilitarian argument promoted by Peter Singer known as effective altruism which states in short (I’m assuming the reader already has some knowledge of this, so I won’t explain it all here) that people should aim to make as much money as possible and then later on funnel it towards good causes.

Now, Peter Singer is a very interesting moral philosopher and I find his arguments quite compelling concerning animal liberation and what it is to be human, but I find the ideas of effective altruism ludicrous. Here’s why:
Continue reading “It’s not all about profit (part one)” →

stolinski Ecobonds

Assel Valley Share Offer

Just saw this share offer via Energy4All for a wind farm on the west coast of Scotland:

The Assel Valley Community Renewables Society are now seeking to raise £1,000,000 under this Share Offer to enable it to purchase a community stake in Assel Valley wind farm.

Share Offer Summary

Minimum Investment £250
Maximum Investment £30,000

Interest targeted to be 4% to 5% (Conditions apply please read the share offer document)

Total to raise – £1,000,000
Closing Date : 1 April 2019

More info at their website

stolinski Best, Ecobonds, My investments

Bond Review – Ecotricity ecobonds

Disclaimer: Just my opinion!

Ecotricity is a 100% green UK utilities company (electricity and gas). They have run four bond offers so far. These bonds are time-limited investments which pay dividends.

The money is used to build renewables projects, mainly wind.

I have invested in these ecobonds and I’m very happy with them.

VERDICT

Would recommend, no regrets investing here – well actually, my one regret is not having got the extra 1% on my investments through being an ecotricity customer 🙂 At the time i was with Good Energy.

stolinski Fund Review

Fund Review – FP WHEB Sustainability Class C – Accumulation (GBP)

Disclaimer – this is all just my zeroes and ones man

FP WHEB Sustainability Class C – Accumulation (GBP)

This fund comes recommended by amongst other Ethical Consumer and DiYinvestor. It aims to invest longterm in sustainable industries, looking towards a fossil free future. So far so good but the devil is in the details. IF it has sustainable in the title, what does that actually mean?

Well after a long time browsing their website it seems there is a vague methodology. As criteria, there are five environmental and four social themes. What are they? They also have an impact calculator from 2017. But where are the investment criteria?

Sustainable?

Well the fund aims to be transparent and indeed information is easily found. The engagement case studies are interesting since WHEB are keen to stress that they apply pressure on companies they invest in. Fair play that they include the not successful alongside the successful engagements on their website, so let’s check a few:

  • A failure: WHEB consider it important for auditors to change every 10 years. Varian have been with Price Waterhouse Coopers for over 50 years. They will “continue to engage” on this issue…
  • A failure: WHEB strongly supports gender diversity but Smurfit only have 2 out of 12 female board directors. WHEB wrote a letter, Smurfit didn’t reply. WHEB will write again
  • A success: “Over the years that Orpea has been in the WHEB investment strategy, the share of independent Directors has risen from 25% to 64%.”
  • A partial success: Engaging with CSL about the ethics of blood tests

Any alarm bells ringing yet? I mean I’m glad they take an interest in these things which i am not saying are not important but these issues are quite far from being directly about sustainability, no?

Top10

Since I don’t know any of the top10 holdings, I thought I would look them up (and they are listed by WHEB on a factsheet):

  • Ansys – develops engineering software
  • WABCO Holdings – Component manufacture and supply for commercial vehicles
  • Xylem – a US water company, spun off from ITT at the same time (2011) that it also spun off its military businesses
  • Linde – manufacture of industrial gases
  • Roper Technologies – a diversified technology company [??]
  • Ecolab – global provider of water, hygiene and energy technologies
  • Danaher Corp. – globally diversified conglomerate
  • A.O. Smith Corp. – manufacture of heaters and boilers
  • Thermo Fisher Scientific – biotechnology product development company
  • Agilent Technologies – Healthcare equipment and services spun off from HP in 1999

These companies mention very ltitle about sustainability on a cursory check. I can understand investing long term in alternatives to fossil fuels but this top10 doesn’t seem to reflect that at all. The eco in ‘Ecolab’ comes from its previous name Economic Laboratories by the way. Let’s go deeper…

A.O.Smith

A.O.Smith had a 2018 Corporate Responsibility & Sustainability Report. When i browsed it, it gives the company’s core values:

  • A. O. Smith will achieve profitable growth
  • A. O. Smith will emphasize innovation
  • A. O. Smith will preserve its good name
  • A. O. Smith will be a good place to work
  • A. O. Smith will be a good citizen

Notice anything missing?

In 2107 A.O. Smith had record sales of $3 billion.Despite being called the Corporate Responsibility & Sustainability Report, there is very little about sustainability. What there is seems to revolve around saving money to make more money.

The Key Investor Information Document states: At least 80% of the Fund will be invested in shares and in companies anywhere in the world in sectors which have been identified as providing solutions to the challenges of sustainability.

I’m not really seeing the links here at all.

Xylem

So let’s go deeper. Do Xylem mention sustainability on their 2018 Annual Report? Actually yes:

At Xylem, sustainability is at the very center of who we are and what we do. As a leading global water technology company, we address one of the world’s most urgent sustainability challenges on a daily basis – responsible stewardship of our shared water resources. Technology is playing an increasingly important role in helping the world solve water issues. We have a long history of innovation, but today, we are focusing more than ever on the powerful capabilities of smart technology, integrated management and big data. These solutions will allow us to transport, treat, test anduse water smarter and more sustainably than in the past, and enable our customers to realize greater water and energy efficiencies. Our link to global water and environmental challenges informs how we think about sustainability and drives us to become a more sustainable company.

That is something at least.

Ecolab

Ecolab does have a focus on sustainability!! “At Ecolab, sustainability is an integral part of everything we do.” Yay maybe they can live up to the name.

WABCO

One mention of sustainability in the 2017 Annual Report: As our industry strives toward environmental sustainability through cleaner, greener vehicles, WABCO is innovating technologies for the rapidly expanding electric vehicles market.

Linde

It emerges from Linde’s Annual Report 2017 that their sustainability contribution is carbon capture and utilisation (CCU). They have built the world’s largest world’s largest carbon dioxide purification and liquefaction plant in Saudi Arabia, next to two ethylene oxide plants. Saudi Arabia being an oppressive regime is a problem for me here.

Not actually that sustainable

Sustainability does not crop up in a search of annual reports for Ansys, Danaher. Agilent had zero hits although sustainable does turn up: We work very hard to make sustainable products,using less packaging and power and meeting the most stringent international standards. Roper has one basically meaningless mention, as does Thermo Fisher.

To return to the WHEB fund itself, it seems it doesn’t have the usual ethical criteria, more a preference to invest in ESG, which stands for environmental, social and governance issues. To me this sounds rather vague and intangible. I don’t doubt these companies are doing something sustainable but it shouldn’t be so hard to find out what.

In the prospectus for FP WHEB Asset Management Funds the word sustainable is not to be found. That’s unbelievable considering they have a sustainable fund!? ‘Ethical’ gives no hits, ‘criteria’ gives 13 but none are relevant.

VERDICT

I’m sorry this is shit. I would classify it as well-meaning liberal rubbish.

Always do the research and go for something really positive screened like Triodos instead if you want to accomplish real change.