There are arguments in favour of identifying and encouraging companies that make an active effort to contribute to communities they work in and to society as a whole, whether via donations or other means. However, not all investors will necessarily share the same priorities as companies in choosing which causes to support
Corporate Governance provides a framework of accountability to a company’s owners, its investors and shareholders. Fundamentally, good corporate governance should facilitate good company performance, ensuring that it is managed in the best interest of its owners.
Investors, the public and government increasingly recognise the need for quality information on corporate policy and practice. For investors to be able to pick and choose between companies, it is essential they have sufficient information to make an informed decision.
Public concerns about the degradation of the environment are becoming increasingly widespread. Companies have responded to this in a variety of ways, with a number of initiatives and approaches being adopted.
Some companies may have improved their equal opportunity records i.e. by developing a system to monitor the effectiveness of equal opportunity policies.
Positive Products & Services
VFS Group has identified five groups of activity which can be seen as providing basic necessities, environmental products and other services which help in solving problems and making the world a safer place.
The five groups are
- Environmental Technology, including products such as machinery for recycling, wind power generators, and pollution abatement technology;
- Waste disposal companies
- Public transport and bicycles, including provisions of bus services and maintenance of railway tracks
- Safety and protection, for examples, alarm systems for elderly people living alone, fire alarms, life jackets and protective clothing
- Healthcare, including medicines, hearing aids and spectacles, housing, food and clothing.
Supply chain issues
The quality of work conditions in global supply chains is a high profile issue of concern to many investors. Many companies are yet to address these concerns. An indicator of progress is the extent to which a company has developed policies to encourage, maintain and improve working conditions in its supply chain.
The testing of cosmetic finishes products and ingredients on animals in no longer allowed in some countries. Some customers believe animal testing to be equally unacceptable in the production of other chemical products
Genetic engineering and modern biotechnology are perceived by some to be unacceptable way of manipulating nature.
Healthy & safety breaches
Investors can show their disapproval of companies that break the rules by avoiding investment in those that have been successfully prosecuted by the Health & Safety Executive
High environmental impact
Public concern about the degradation of the environment is becoming increasingly widespread.
Investors have traditionally boycotted certain countries, but increasingly it is being argued that countries need investment to improve basic social and economic rights. Against this background some people have concerns about the activities of certain companies.
Many people are concerned about food quality, particularly food contamination, antibiotic residues and the use of growth hormones and pesticides.
Some people believe that the use of military force is unacceptable, either of defensive or offensive purposes.
The threat of radioactive contamination from an incident at a nuclear power station typifies the concerns many people have about nuclear power.
Excessive pesticide use can lead to the build-up of chemical residues through the food chain, damage to birds and insects, injuries and deaths among farm workers and damage to animal and human immune systems. Some chemicals are also ozone depleting.
There has been increasing conserns in the last few years about the effects of environemntal pollution on health. A small number of prosecutions are carried out against companies each year as a result of non-compliance with legally issued notice or following a serious pollution incident.
Pornography and adult films
Pornography is often objected to on the grounds that it may deprave, corrupt and degrade, contributing to sexual violence and sex discrimination. There has been rising public concern about internet pornography and worries about children using the internet and accessing offensive material.
Deforestation, including the clearance of land for agriculture, plantations and development, commercial logging and the collection of fuel wood can have damaging effects on the environmental and threaten the survival of certain wildlife.
Third World concerns
Many investors are concerned that too many companies put profits before princlples in their dealings with the third world, and that by doing so they are actually contributing to third world poverty and its dependency on developed economies.
Traditional ethical concerns
The production and sale of alcohol and tobacco, as well as profits from gambling, have concerned some ethical investors for many years.
Often caused by industrial discharges, water pollution has both environmental and social impacts