Ethical Investments Versus Boycotts
There’s a certain similarity between ethical investments and boycotts. Both of them have been used frequently historically in order to bring about social change, and they have both had varying degrees of success. People have managed to convince businesses to change their practices as a result of well-publicized boycotts. Ethical investors have managed to shape market sectors as a result of putting their money in the right place. However, these two groups are not equal in terms of their influence. The people who conduct boycotts and the people who are in a position to invest ethically differ significantly in terms of the level of power that they have.
Boycotts have been successful in many cases, but there are also many cases of boycotts being unsuccessful. Businesses have to really believe that there’s a severe threat to their profit margins in the midst before they are going to be willing to change any of their business practices. In some cases, businesses won’t even be able to change in response to the boycotts for whatever reason. Boycotts also need to be able to attract large followings before they are going to be able to make any real impact on businesses. Generating this sort of following is easier today in the Information Age. However, it is still going to be challenging, and many activists will spend years on tasks like this, to no avail.
Ethical investments have a way of approaching the same issue from a different angle. Investors are looking for businesses that have the right practices in the first place. They can then lend their support for these businesses. The people who conduct boycotts are looking to take support away from established businesses until those businesses are willing or able to change, which may never be the case. The people who invest ethically are lending their support to the companies who already have great business practices, and the ethical investors know in advance that their efforts will certainly not go unnoticed. While both approaches can be effective, there is a certain wisdom in the approach of the ethical investor.