I’ve been talking about Sustainable Investing recently and keep getting blank looks. What really is Sustainable Investing? At its core, it is a way to manage risk in your investments. It is easier to understand this by looking at the risks we face in our lives and neighborhoods each day. We all face different risks, which has become very apparent with a worldwide pandemic and the simultaneous highlighting of police brutality with people of color. Managing these risks for ourselves necessitates managing them for those around us. Healthy societies call for standing up together for one another. Our neighborhoods are much bigger than we imagined.
Let’s start with a quick demonstration of Sustainable Investing.
A company is moving to town. They want to build a factory in my neighborhood. They will bring jobs but also the air will be polluted and maybe the water too. I think, “Can’t we have a factory and jobs without the pollution?” (Answer: yes, but it costs more in the short-term). I don’t want pollution in my neighborhood because it’s not good for me or my neighbors.
So, what if the factory is going to be in another town, say one 50 miles away. Now I’m not so concerned, right? Actually, I still am. Pollution travels. Plus, the farms where we get our food are near that town. I don’t want the factory in that neighborhood either because it’s not good for me or my neighbors.
And what if the factory is across the world? Turns out I care about those neighborhoods too, because pollution there isn’t good for me or my neighbors. Air pollution travels, some of our food is transported from around the world, and we all use the same oceans. So that means we’re back to finding a better way to build a factory that doesn’t pollute but makes great products and turns a good profit.
Sustainable Investing acknowledges that my neighborhood is a whole lot bigger than the couple of miles around me. And that a company that treats the community poorly, be it through the environment, the employees, or the government, is a risky investment. If a company is doing things that would make me not want to be an employee (say it makes clothes in unsafe factories), a customer (maybe it charges me fees it doesn’t disclose), or a governing body (say it uses fancy accounting to hide taxable events), I don’t want to be a shareholder either. All of these three examples would save a company money in the short-term. And could cost a company much more in the long-term through a ruined reputation, customer backlash, and fines and extra regulation. These are items that don’t show up on the bottom line until the damage has been done. Smart investors steer clear of these companies and instead look for sustainable investments.
Which gets me to Sustainable Living. Just like with investing, my neighborhood is no longer the several miles around where I live. My neighbors aren’t just people who look like me. My kids aren’t just the ones in my home. Since George Floyd was killed in police custody in May 2020, the world has seen, once again, the anguish of another black life extinguished by a force that is supposed to protect. Many white folks have seen first-hand that the police force they encounter is not the same one people of color encounter. Black sons and daughters are not safe. Our sons and daughters are not safe. As long as anyone in our society is not safe, none of us are safe. I’m reminded of two quotes that speak directly to the situation of human beings not standing up for other human beings around them:
Martin Niemöller, a pastor in Nazi Germany,
First they came for the socialists, and I did not speak out—
Because I was not a socialist.
Then they came for the trade unionists, and I did not speak out—
Because I was not a trade unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me.
Desmond Tutu, Archbishop of the Anglican Church of South Africa
“If you are neutral in situations of injustice, you have chosen the side of the oppressor. If an elephant has its foot on the tail of a mouse and you say that you are neutral, the mouse will not appreciate your neutrality.”