Today, there are all sorts of technical terms for investment approaches that seek to bring personal values to bear on financial decisions. For example, ethical investing, responsible investing and environmental, social and governance (ESG) investing. The longest standing such term is perhaps ‘ethical investment’. Dating back to the nineteenth century, the roots of ethical investment can be found among religious movements including the Quakers and Methodists, whose concerns included issues such as temperance and fair employment conditions.
A hundred years ago - the start of ethical investing?
At the beginning of the 1900s, the Methodist Church in North America decided to invest in the stock market, having previously viewed such practice as a form of gambling. However, their decision came with a proviso: they wished to exclude certain types of companies, specifically those involved in alcohol or gambling. The Quakers soon followed their example and were especially keen to avoid weapons manufacture.
Public demand for ethical investment vehicles took off in America with the launch of the Pax Fund in 1971, as a reaction to the Vietnam War. Discontent caused by the war had led some investors to question how their money was being used. Many were particularly angry with the manufacturers of Agent Orange, the defoliant sprayed on Vietnamese jungles, which caused deformations in the babies of people who came into contact with it.
