In last week’s blog post about investing in Stocks & Shares ISAs, I mentioned that all my investment accounts are so-called ‘ethical investments’. This generally means that my money is not invested in companies which develop weapons, produce oil and gas, produce cigarettes or alcohol or are involved in gambling.
This should mean that your money isn’t being used to prop up companies that are actively making the world worse. But should is the key word here, and what an Exchange-traded fund (ETF) manager considers ethical may not match my ethics.
My Nutmeg LISA is invested in a number of ETFs, which are in turn invested in companies and bonds. However, it does offer a list of the top 10 companies that your ETFs are invested in. I’ve included the list of mine in the screenshot; although this was taken last week, the data is correct as of the 29th February so I’m guessing it’s not updated often.
Microsoft, nVidia and Tesla
Almost 3% of my money is invested in Microsoft. Okay, so they’re not an oil and gas company and don’t make weapons, but they’re investing heavily in AI. AI needs a lot of energy and their investment in AI means they’re polluting more now than in 2020. Similarly, nVidia is doing well because its chips are optimised for AI.
Tesla is third, and, urgh. Sure, they’re making electric cars which are quieter than petrol or diesel and produce no tailpipe emissions, but its boss is a human bin fire who is opposed to worker unionisation.
Coca-Cola and PepsiCo are in there too, both of which are best known for manufacturing sugary drinks.
Whilst I still think ethical investing is the right thing to do, I am concerned that they’re a form of ‘green-washing’. Just because a company isn’t actively destroying nature or ruining people’s lives, it doesn’t make them ‘ethical’. I’m sure there are funds out there which focus on companies which are actively doing good in the world – maybe one that only invest in B Corps, for example. Maybe I need to spend more time looking into alternatives.