“Look out!” grimaced Blue. “There’s the Trump supporter gulping Scotts Valley Coffee!”
“Where else?” responded Red. “And you must be the Ben Lomond neighbor who erected the 50-foot lime green ‘Bernie Sanders Soviet Honeymoon’ statue over my yard?”
“He jousts your greedy 50-foot gilded paper-mâché ‘Trump Admires Putin’ statue!”
“To keep SLV peace,” spoke Mr. Gridlock washing cups, “I won’t call code enforcement, but I’ll pay you two a million dollars to invest in a single socially-responsible fund!”
Environmental, Social and Governance (ESG) Investment Choices
“I’ll buy Disney now that it has dumped LGBT activism for a ‘Talent Strategy’ and any small patriotic company that doesn’t promote abortion drugs, pornography, payday loans, casinos or slave labor. The Bible says: ‘You shall not bring the fee of a prostitute or the wages of a dog into the house of the Lord.’”
“Costco, Delta and Apple keep DEI, but I also want ESG investing to resist global warming, help women and gays, make agriculture sustainable, better inner-city housing, improve water quality and healthcare and fight slavery in our labor markets. No weapons, cigarettes or coal mines. Activists fight in board rooms!”
“Yet you both opposed cigarettes, slavery and female exploitation, bribery, tax evasion and fraud,” spoke Gridlock dispassionately, “and you both ordered hot Pastrami sandwiches!”
Quoting Solomon, the Biblically Responsible Investing (BRI) champ responded: “Better is a little with righteousness than great revenues with injustice.”
“Rye bread’s a start,” spoke Blue. “A quarter of America’s investments are consciously sustainable and half of Europe’s.”
Stewardship for Stakeholders
“We both are stewards of the earth!” boasted Red.
“I would just call this ‘Corporate Social Responsibility,’ because businesses consider not just profits but the social, environmental and economic effects on all ‘stakeholders.’”
“But the standards are all subjective,” said Red, “unfounded in ancient wisdom. How will you measure sustainable agriculture against corporate transparency fairly?”
ESG and BRI Ratings
“You extra-collegial conservatives are hopelessly behind in theoretical standards. MSCI ranks stocks, bonds or funds on ESG principles with graded ESG ratings (A, BBB, etc.) overall and separately.”
“Glad to see MSCI created standards. I buy Inspire ETFs and utilize ‘Inspire Impact Scores’ for the provocative BRI index (briinstitute.com), but could settle for a single apolitical investment ranking system with cute compass needles.”
“That’s a good middle path solution!” injected Gridlock, delivering soothing smoothies.
“Government standards! The UN is working on international ‘Sustainable Development Goals’ for companies.”
“You fear choice and I fear that Corporate Responsibility will drive us toward international socialism” said Red. “Can’t we just make money together with good conscience?”
Doing Well by Doing Good
Blue responded heartily: “Morgan Stanley found that ESG securities usually generated higher returns with lower volatility, probably due to greater consumer and employer loyalty. Sustainability cuts energy costs and fair labor policies encourage hiring and retention of great employees. Between 2012 and 2022, the Calvert Environmental Solutions Fund earned annualized returns of 14.26%, beating the Russell 1000 Growth Index’s 14.09%.”
“Harumph!” injected Red. “The BRI Institute battled conservative-screened stocks to the S&P (briinstitute.com/backtest.pdf) to a draw that showed: ‘… in the long term sin has not won!’”
“No guarantees!” interjected Gridlock.
Red admitted: “Indeed, companies which disobey laws fear fines or lawsuits deserve failure—see Volkswagen’s or Enron’s lies—and oil spills ruin companies. Yes, conservatives agree with voluntary product safety and consumer protection. Big Tobacco kills over 5 million a year and we won’t buy its stocks.”
“Tough questions deserve tough answers,” Red retorted. “How can clothing makers adjust to living wages? Patagonia leads sustainable fashion with ESG investments. Certainly sustainable energy will hurt oil workers in the short run and water conservation and species protection may harm even responsible farmers.”
“Yes, but nuclear stocks are good because they lessen global warming!”
“And proliferate arms. I hear that the California Clean Energy Fund invests in cKers Finance ‘Sustainable Energy Bonds’ for India; we could get some green bonds together because you don’t oppose solar and wind. Or micro-loans that give people a start in life?”
Red agreed: “ESG investing, respectfully organized and measured, need not disturb our coffee time further.”
“Do well by doing good!” blurted Gridlock, deftly downloading sandwiches that mended fences. “But please celebrate July 4 together as you tear down those horrid statues!”
Robert Arne, EA, CFP, MS, of Carpe Diem Financial Life Planning, gives holistic financial advice as his client’s fee-only fiduciary. He serves mostly Santa Cruz Mountain dwellers. These articles must not be read as personal financial, mortgage, tax or investment advice; consult appropriate professionals. Learn more at www.carpediem.financial.
