There are a number of interesting events taking place during this year’s National Ethical Investment Week – one of which was hosted by Ethex, a non-profit that gives clear and simple information on ethical investment that recently featured on Blue & Green Tomorrow. Here’s what happened when some of the sector’s leading lights got together for an afternoon of tea and debate.
English coffee shops and tea houses of the 17th and 18th centuries were famously the venues for vigorous debates on everything from democracy to artistic avant-garde, so perhaps it was no surprise that the crowded back room of Drink, Shop & Do proved such a perfect venue for our ‘Tea & Debate’ on ethical investing on Monday.
We made our way through the craft shop entrance and the high ceilinged tea room to pack out a domed chamber, where our four panellists debated the motion, “This teashop believes that socially responsible investment (SRI) is for dummies“, ably moderated by Matt Black of Social Enterprise Magazine.
A vote from the audience at the outset demonstrated a mountain to climb for those arguing in favour of the motion: two supporting; 38 opposing.
Ethex’s founder, Jamie Hartzell, set off up the foothills, with a passionate and fact-filled case that SRI is for dummies in three senses: firstly SRI promoters are dummies to think it is truly ‘responsible’; secondly we are dummies for believing them; finally,everyone is acting like dummies for doing nothing about it. “How can you take seriously a set of products that includes a ‘sustainable futures’ fund with large holdings in oil shale exploration, one of the most ecological damaging forms of fossil fuel extraction?!“, he asked. This couldn’t go on, Jamie argued, and “this will change, because ethical investors are good people and you can’t keep selling good people bad products“.
Too strong, replied Clare Brook, founding partner at WHEB Asset Management: yes, many of the flaws highlighted are true, but taking a look at the overall picture there is much good being done. She’d seen some company board members literally perspiring under the pressure of shareholder engagement from SRI fund managers. Furthermore the best sort of SRI is investing in companies providing solutions to the most serious crises faced by the world – everything from clean energy and transport to efficient lighting, healthy eating and improved surgery.
“The son of one of our advisers heard seagulls for the first time recently thanks to a Siemens hearing aid”, she said. So SRI – the best kind – is doing much good. “It’s only for dummies if it’s dumbed down!” she concluded.
Good, but almost irrelevant argued Louis Brooke (no relation to Clare!), from the Move Your Money campaign. Look at the numbers: SRI makes up 0.2% of managed funds in the UK. Given the current growth rate, it would take 70 years to achieve 10-15% market share. If we wait for SRI to change the financial system, and save the world, we’ll all be dead! SRI supports the financial status quo rather than challenging it to the root and branch reform that is needed. We are dummies if we think that SRI will get us there.
Hold on a minute, said James Vaccaro from Triodos Bank, finishing off the presentations from the panellists. “Is fair trade for dummies because it doesn’t reform the global trade system?” No, of course not. We are all here because of the progress that has been made. We need to celebrate what has already been achieved, as well as looking at the huge amount yet to do.
After such passionate cases in support and opposition, the rest of the room eagerly joined in, with many excellent points excellently made: is mass shareholder engagement not far more important than SRI, asked a representative of FairPensions – surely that is the way to influence trillions of dollars rather than billions?; the great problem is a disconnection between the public and the workings of the financial system, argued Patrick Hynes from OikoCredit (an Ethex business member) – it’s not SRI that’s needed, but “education, education, education“.
Ultimately, all four panellists were on the same side. “This debate is dividing four people who essentially agree into two camps for everyone’s entertainment!” said Clare Brook – but perhaps the key dividing line fell between how much they favoured evolution versus revolution. “Like the politicians we are all arguing for the middle ground“, summarised Hartzell, “but there is a role for more radical alternatives“.
In spite of their valiant efforts, Jamie and Louis did not completely turn the audience vote around. The final score (-ish) was:
Yes, SRI is for dummies = 7
No, SRI is not for dummies = 20
Abstentions = 3
After much mirth, and even more cake, the event wound to a close with general agreement that the first annual Ethex Tea & Debate on Ethical Investment should most definitely be followed by a second, and James Vaccaro summed up proceedings with a question that everyone in the room could agree with: “How can we spread this debate wider, and get the public at large engaged?” Perhaps we should go for the O2 Arena next year, he suggested.
We love your optimism, James. Ethex is being launched to open up truly ethical investment to everyone – so why not set our sights high? Thank you to our panelists, moderator and everyone who attended for a lively, fun and thought-provoking evening. And thanks to Drink, Shop & Do for a lovely venue and those delicious cakes.