↑ comment by UriKatz ·
2015-01-09T11:14:42.798Z · EA(p) · GW(p)
I will start my reply from the end. Your intuition is right. My investment will simply go into another share holder's pocket, and the company, socially responsible or otherwise, will see none of it. However, this will also decrease the company's cost of capital: when they go to the markets for additional funds, investors will know there is a market for these stocks and will be willing to pay more for them. I have no data on the extent of this impact.
As for your AMF example, I have no way of quantifying the good my SRI (socially responsible investing) may do, unless I fall upon work that someone else did on this subject. My main concern, however, is more along the lines of facilitating harm. For example, am I endorsing, or even causing, suffering by buying stocks in a cosmetic company that does research on animals? My meager funds obviously have little effect, but there are good reasons to think that every penny counts, and besides the issue here is that of comparing different outcomes for these meager funds.
At this moment, I think that for me the "do no harm" principle is a good enough reason to earn a little less. My main problem is that an SRI focused portfolio might require more attention and consume more of my time, time I may not have to spare.
Finally here are a few more useful links the subject:
http://academiccommons.columbia.edu/download/fedora_content/download/ac:126635/CONTENT/HowResponsibleisSocially12_9_04.pdf - a short academic paper on the subject (there must be more recent ones, but this gives a pretty good overview).
http://www.yourethicalmoney.org/investments/ - a chart with SRI mutual funds and thier policies.
http://www.ussif.org/ - A nonprofit dedicated to SRI
Replies from: RyanCarey
↑ comment by RyanCarey ·
2015-01-09T12:43:25.127Z · EA(p) · GW(p)
Cool. Yeah I don't know how much harm normal stocks do compared to socially responsible ones, although I imagine they both do a lot of good on average.
Philosophically, I'm not sold that "do no harm" is decisive here, because you're doing harm by earning less money and withholding donations to amf in a sense.