Making dollars and sense from ethical investing

This interview with WHEB sustainability investors Managing Director George Latham is a good look at the performance of ethical and sustainable investing.

It’s noteworthy though for two reasons in particular.

Firstly, for Latham’s rather handy description of ethical business as those creating “solutions to sustainability challenges” and the fact of their growth.

We find that the universe of companies that are creating what we call a solution to sustainability challenges is generally growing at a far superior rate to the rest of the world market. There is strong growth in providing good outcomes for society and the environment. Because we need more of those products that help solve the world’s major challenges.

– George Latham, WHEB Managing Director

Secondly, for Latham’s description of how ethical investing has moved from being simply a moral concern in the 90s when he started working in this space, to a legitimate and increasingly common consideration of risk and return for investors.

This reflects nicely, if somewhat superficially, the process of social change: behaviours that address socially or environmentally damaging practices emerge at the fringes before gradually being adopted by more and more people until they become normalised and part of our institutions through for instance law or established business practice.

It can often be hard to see this process (and thus the progress) of adopting socially and environmentally just behaviours because it’s generally slow. These behaviours are either already normalised in our lifetime (eg. women’s and civil rights) or considered fringe concerns (eg. veganism, polyamory).

So while Latham describes the mainstreaming of ethical investment within the investment industry, he’s also describing how sustainable and ethical behaviours come to be seen and adopted as completely normal with time. It’s worth considering what behaviours or concerns that are considered fringe today will be normal in a generation or two’s time…

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