Ditching tobacco and arms does not make you an ethical investor

Ethical investment campaigns shouldn’t focus on so-called sin stocks like tobacco and alcohol, but on all sectors that act unethically

It is becoming increasingly common to question the ethical dimensions of investment. Institutions, pension funds and individuals have faced pressure to divest from investments in controversial industries, including so-called sin stocks such as alcohol, tobacco and arms companies.

The debate around sin stocks, though, is a confused one that risks misrepresenting what ethical investment should focus on.

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Ditching tobacco and arms does not make you an ethical investor

Ethical investment campaigns shouldn’t focus on so-called sin stocks like tobacco and alcohol, but on all sectors that act unethically

It is becoming increasingly common to question the ethical dimensions of investment. Institutions, pension funds and individuals have faced pressure to divest from investments in controversial industries, including so-called sin stocks such as alcohol, tobacco and arms companies.

The debate around sin stocks, though, is a confused one that risks misrepresenting what ethical investment should focus on.

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£1984: does a cashless economy make for a surveillance state?

A future without money would mean a surveillance state where every transcation is tracked by banks and the state, apart from those using cryptocurrencies like Bitcoin

If you type “money” into a Google image search, you get pictures of metal coins and paper notes. People fixate upon this physical currency, but while we still use such transferable tokens for many small transactions, large ones are inevitably electronic. When Rolls-Royce acquires metal to produce jet engines, it doesn’t hand over a bundle of pound notes. It makes an electronic transfer from its bank account to the metal dealer’s account.

Increasingly, though, we use electronic transfer in small-scale transactions too. Rather than handing over physical tokens, you might tap a contactless payment terminal at the supermarket. This sends a message via an electronic communication system – the Visa or Mastercard system, for example – that instructs two banks to edit account databases that keep score of the buyer and seller’s money. The money “moves” owing to third-party payment intermediaries changing your records in their data-centre hard drives.

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Open data can unravel the complex dealings of multinationals

Groups like OpenOil and Sourcemap could be the beginnings of an alternative accounting system that helps investors make sense of global businesses

If you are a socially conscious investor trying to build a holistic picture of BP’s operations, where do you turn to? Despite appearing to the public as a single entity, a corporation like BP is actually a network of more than 1,000 separate subsidiary companies operating a sprawling web of assets across the world.

The sheer amount of data generated from operations is too great for the average investor to check.

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