ESG: Should I invest ethically? We unpack the debate

HOSTS Alec Renehan & Bryce Leske|28 September, 2021

Meet your hosts

  • Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

This episode Alec and Bryce start a new chapter – about all things ESG. In this first episode, they look at the landscape, and answer the most basic questions – just what is ethical investing, why you would consider ethical investing as part or all of your portfolio, what are the arguments for and against, and they share their personal views. 

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Bryce: [00:00:30] Welcome to get started investing in this podcast, we cover all the basics that you need to start your investing journey. Are you joining us for the very first time or is this the very start of your investing journey? Well, before you dive into this episode with us, our feed is designed to go from the very beginning. So we strongly recommend that you scroll up and start at episode one. But if you're feeling brave and just want to dive in, then of course, don't let us stop you here at Get Started Investing feed. We unpack all the jargon and confusing bits here, your investing stories with the goal of making investing less intimidating. And we want to have a good time along the way. My name is Bryce and as always, I'm joined by my Equity Mates Ren. How's it going? 

Alec: [00:01:08] I'm very good. Bryce very excited for this episode and this three part series on a topic that is on the tip of every investor's lips. ESG, sustainable investing. 

Bryce: [00:01:24] That's it. Huge topic and a lot to cover. We're going to do this over three episodes. Continue on with our series that we have haven't touched on because we've been having a few interviews which have been really enjoyable. But over the next three episodes, we're going to be focussing on all things ASG before we crack in. We are looking for the best stories out there in the JASSI community to help with our Get Started Investing feed Summer series. Over summer, we're going to be doing six episodes featuring some of the most entertaining, most rewarding investing stories from the Get Started Investing feed community. Mistakes, lessons, you name it. We want to hear them and we want to give you the guys the opportunity to come on the show and share them with us. You can remain anonymous if you want to. 

Alec: [00:02:11] Yeah, we can put one of those voice modifiers on. Yes. 

Bryce: [00:02:14] DOB in a friend. Anyone who has a great investing story, good or bad, we want to hear it. And this is your opportunity to be involved and have a small piece of Equity Mates history and memories caked into audio form 

Alec: [00:02:30] with a sales pitch like that how could you say no? 

Bryce: [00:02:34] So hit us up at or head to our website, Shoot us an email if you'd like to be involved and we'll reach out with further details. It's not going to be scary. It doesn't have to be long, but we'd love to hear from you. So anyway, Ren the next three episodes, what can we expect in this ESG. Special? 

Alec: [00:02:53] Yeah, so we've tried to break this big topic up into three episodes. So in this first episode, we're going to focus on why ethical like why people are choosing to invest ethically. What are the arguments for it? What are the arguments against it? We'll share some of our personal views. Then next episode, we're going to talk about what is ethical. And there's a number of different ways that you can invest ethically. There's a number of different frameworks and screens that different investors use. So we're going to Deep Dive on that. We're also going to talk about how we can actually find information about companies to determine if they meet our standards of sustainable or ethical investments. And then finally, in the third episode, we're going to talk about what are the options out there? How how can I actually put my money to work? What managers are investing ethically? ETFs, managed funds, superannuation. We'll cover it all. So, you know, it's a big topic and it's a really hot topic at the moment. If you're feeling a little bit lost or it's you know, you don't know where to start, hopefully this will set the groundwork for you to really dive deep into it. 

Bryce: [00:04:03] Absolutely. So without further ado, we're going to be talking about why ethical and that must start with a definition Ren around what is ethical investing. Yeah, let's talk about it. 

Alec: [00:04:16] So, I mean, the the dictionary definition of ethical investing is it's the practise of selecting investments based on ethical or moral principles. Ethical investors typically avoid investments from sin stocks and companies involved with stigmatised activities such as gambling, alcohol, smoking or firearms. So that's the dictionary definition. But what we say in twenty twenty one is that a lot of ethical investing is really focussed on climate. 

Bryce: [00:04:45] Yeah. And the impacts that companies are having and their stance on climate. Yeah. 

Alec: [00:04:50] Yeah. And there's obvious reasons for that. It is the number one issue for not just investors but for people generally. And you know, we talk about being ethical consumers and we talk about, you know, making purchases that are aligning with our ethical philosophies and that embrace sustainability. If that's something that's important to us and really in ethical investing is just an extension of that. It's it's using your money in deliberate ways that don't create harm. 

Bryce: [00:05:24] It also spreads well beyond what the definition has here. You know, they've mentioned. Gambling, alcohol, smoking, firearms, you've mentioned climate change, RSG environment, social and governance. So some people take the approach when it comes to ethical investing is they want to see more women on boards or they want to see how the companies are positioning themselves in society and doing good for society and community. So there's many ways that you can approach and define ethical investing under those environmental, social and governance. And as we go through the next three episodes, it'll probably become clear that ethical investing means different things to almost every single investor. Yeah, yeah. 

Alec: [00:06:05] And in the next episode, we're going to talk about some companies where that that decision is really difficult, you know, to take one Tesla from a sustainability standpoint, you can't argue that it's it's been one of the most transformational companies in terms of changing our transport infrastructure, moving away from oil and towards electric vehicles. But on the other hand, you know, governance is a question with Elon tweeting thing and getting slapped on the wrist by the US regulators. You know, the questions about his treatment of workers when they were forced back into factories during covid. And so it's an ethical dilemma, I guess, how you balance competing factors and every company has competing factors. Absolutely. And, you know, if you think about companies that are traditionally probably very unsustainable, AGL is operates two coal fired power stations in one in New South Wales, one in Victoria. But they're also one of the biggest investors in renewable energy generation in Australia. So how do you balance what they were and what they're trying to become? And so there are some of, I guess, the challenges that we'll unpack over this three part series. But we're only at the definitions. Yes, that's that's what ethical investing is. It's it's investing ethically. Yes, sir.

Bryce: [00:07:32] Ren, let's set the scene, because this is certainly not just a fad that we're seeing. This isn't going anywhere. In fact, it's only becoming a stronger and stronger, I wouldn't say movement, but the money is starting to really talk when it comes to ESG and it's been it just continues to set records. 

Alec: [00:07:53] So, yeah, ethical investing has a long history. Australian Ethical Investments, which is a big money manager in Australia, was founded in 1996, but it really has taken flight over the past few years. The the boys from comedian The Economist shared a chart with us that we put on our social media last week that shows just how much money is flowing into the sector. And it's really accelerated over the past two years. And we've got some we've got some stats in terms of inflows. So Bank of America have noted that this is this is from data from April this year. So it's a little bit dated already, but global equity funds recorded one hundred and twenty three billion dollars US dollars in inflows in the year to date, April twenty twenty one, which was up one hundred and ninety three percent from the year before. 

Bryce: [00:08:47] And to take it like right back to basics, what do we mean by one hundred and twenty three billion in inflows? 

Alec: [00:08:52] So that's the amount of money that investors put in ethical funds. They, they took it from cash or from other assets and moved it to ethical investing funds. 

Bryce: [00:09:06] So huge amounts of cash, but also really significant growth up one hundred and ninety three per cent, I'm assuming on same time last year. 

Alec: [00:09:13] Last year. Yeah. In that same Bank of America report, they said so far in twenty twenty one, nearly three of every ten dollars globally have been going into Astraea funds. Wow. Yeah. 

Bryce: [00:09:27] So thirty percent, 

Alec: [00:09:28] so thirty percent of the money moving into equities, into the stock market or into fund managers is moving into ethical funds. 

Bryce: [00:09:38] Wow. Yeah. So the, the funds flowing in people are starting to really put their money where their mouth is or become really interested in this space and start taking a stand on RSJ Investments. So a lot of money is coming in. But where does that stand in terms of total money that is being managed at the moment in history? 

Alec: [00:09:58] So Morningstar estimated that one point seven trillion dollars in 2020 was being managed by ethical fund managers. So a huge amount, but I think the projections are pretty interesting, so Bloomberg have estimated that by 2025, global assets are expected to exceed 53 trillion dollars. Now, that's a big number, but that number without without context is just a big number. So that 53 trillion dollars by 2025 and Bloomberg estimate that the total assets under management will be one hundred and forty point five trillion dollars. More than a third of the total money invested in stocks and bonds will be invested ethically. It's unbelievable. Yeah, yeah. I mean, you know, we've spoken to experts on the show before that talk about there will be a day when we don't need funds labelled as ethical funds because it's just going to be part of everyone's investment process. And, you know, everyone will have to factor these considerations in mind. 

Bryce: [00:11:04] So record inflows that we're seeing, record numbers of assets under management, huge amounts of money now being managed in ESG assets expected to grow to significant levels even within the next five years. So so what has been the response from the the fund managers that, you know, that have been traditionally not so concerned about ESG? 

Alec: [00:11:32] Yeah, it's they're now concerned. Yeah. And, you know, cynically, you could say they're concerned because that's where the money's going and they want to be where the money's going. But regardless if you're cynical or you're optimistic and you're saying they're doing the right thing, the fact of the matter is they're doing it. And we've seen a number of the big institutions move to, I guess, implement ethical standards in their investing decisions, probably no more notable than BlackRock. So BlackRock is one of the world's largest money managers, I think, if not the world's largest. I think Vanguard's got them now. So Bryce BlackRock have nine point five trillion dollars in assets under management. That's it. Maybe Vanguard don't have them. Um. Yeah. Okay, I'm just Googling it and Vanguard don't have as much. They haven't got seven. I mean only is a relative rookie. Look BlackRock either the biggest or one of the biggest money managers in the world and they're global CEO Larry Fink wrote a letter to not only to companies that they invest in, but really to the public, basically saying that BlackRock are taking ethical investing seriously. They're going to be releasing more ethical products and they're going to be holding companies accountable and really engaging with them and, you know, driving change or they'll be selling their shares. 

Bryce: [00:13:01] And to their credit, they've really done it. And like, it's very, very clear when you go on the BlackRock website now, the way they all talk, the products that they're releasing, the information that they're providing, like they've really done what they said they were going to do. 

Alec: [00:13:15] Yeah, one thing that I've often dreamt about well, and I've tried to get up on 

Bryce: [00:13:20] your show insight into Bryce 

Alec: [00:13:23] is we hear a lot about this engagement. You know, we're engaging with companies what what to do better. And that's all a little bit opaque. Yeah. Like there's not a lot of clear case studies where it's like where BlackRock on our website were saying this is a company we engaged with and this is the change we drove. Yeah. And I've got one example later in this episode where there was an activist ethical investor that made a difference in a big company. But it's really hard to get a lot of concrete case studies on that. And I would just love it. And I understand that there's privacy concerns and companies don't want to be shamed publicly on their investors websites and stuff like that. But I think it would do everyone a service if some of these ethical managers could be a little bit more public with we hold shares in a company that you might not think is ethical. Here is the change that we're driving. And these are the like the metrics that we've set. And we've said to the company, if they don't achieve these by this date, we're going to sell. And then it would just be a bit like, OK, we understand. 

Bryce: [00:14:27] Yeah, I think that actually be really beneficial for the company to attract new investors into their company. 

Alec: [00:14:33] Yeah, yeah, yeah. 

Bryce: [00:14:34] If they can just say invest in us, here's our track record of actually making change. 

Alec: [00:14:38] Yeah. Yeah. We know that we're starting from a low base because we're in a carbon intensive industry or because for whatever reason. But anyway we digress massively. Yes. True. True. So to sum up where we're at now, ethical investing is the it's probably the fastest growing area of the market. It would be the fastest growing area of the market. Big institutions are taking note. Companies are taking note and really responding, I guess, to this investor. Demand to fall for ethical options, but there's still a debate about should you invest ethically? And so I think let's take a quick break and then talk about this debate so people can, I guess, decide what side of the debate they fall on.

Bryce: [00:15:24] So Ren, you mentioned there before the break that there is still debate around investing ethically, the reasons why people would do it. And perhaps, you know, the flip side of the argument is why? Why shouldn't you or some of the reasons against investing ethically? So let's start with the pros. 

Alec: [00:15:43] OK, let's start positive. 

Bryce: [00:15:45] Let's start positive. 

Alec: [00:15:47] So I think there's there's sort of two aspects to why people choose to invest ethically. The first is a very personal reason. If people want to invest in things that they feel good about, they feel proud to own, not things that they feel guilty about. And that personal aspect of why you choose to invest in certain things is important. The debate really here centres around whether ethical investing actually makes a difference. So I think let's focus on that aspect of the debate, because people's personal preferences are people's personal preference 

Bryce: [00:16:19] values, their values.

Alec: [00:16:20] There's not a lot of debate that can happen there. Yeah, yeah. What you feel is what you feel. So let's focus on the debate around ethical investing actually matter. Does it make a difference? And I think the first the first reason that people give is that if you are investing ethically and you're selling shares in companies that don't meet your ethical standards, those companies are incentivised to change because they want your capital. They want your capital to keep their share price high. Executives are renumerated based on share metrics. You know, like if if you're a CEO, a lot of the times your bonus is tied to hitting share price growth. And if a whole chunk of the market is saying you're not sustainable enough or you're not ethical enough, we're selling you. That depresses your share price. And as a company leader, as a company executive, that's not good for you. So so the first reason is that it forces action from companies. 

Bryce: [00:17:23] Yeah. And people might be a bit sceptical as to whether or not this really plays out. And I know you've got a couple of examples there, but this one's hot off the press. I don't know if you saw yesterday what happened at the AGL board meeting. 

Alec: [00:17:36] They just avoided a second strike, 

Bryce: [00:17:38] just avoided a second strike. But there was also a vote that went to. So firstly, a student climate activist who proposed himself for the board of AGL got two per cent of the support from proxy votes. So it didn't quite make it on. But a significant amount of proxy votes went to him. And the shareholders actually voted against a board recommendation around how they were going to set emission targets for a number of their demerged businesses, essentially saying, we disagree with that completely. You must bring everything you're doing in line with the Paris accord. And so that really through the board, who have obviously been saying, no, no, no, we need you know, we can't have this is a crash landing. We need this to be smooth. Obviously, there's AGL being one of the biggest providers of energy here in Australia are right in the middle of this debate. But it was great to say that shareholders really having an impact here with the power that they have in the investments they have in the company. 

Alec: [00:18:41] So that's that's the first reason. A great example. Yeah, the the second argument is pretty closely related to the first, but there's a new one. So if the first argument's all about it forces internal change in the company, the second argument is that by aggregating all of our money in ethical funds together, that combined weight can really force change from the outside. Money can make a difference if there's enough of it all rowing in the same direction. And, you know, there's a number of examples of this. Probably my favourite one is that Exxon, one of the biggest oil companies, oil and gas companies in the world, listed over in the States. There was an activist hedge fund called engine number one. Not now, not sure where the name comes from, but they led a movement and they were backed by a number of ethical focussed investors that forced three new directors onto the board of Exxon. And those directors have a mandate to reduce the firm's carbon emissions. So if there's internal pressure from the share price falling or not being supported as much because people are selling shares, and secondly, those that continue to hold shares, if they act together as shareholders can, can really force companies to change. 

Bryce: [00:20:07] And just to bring that back to basics, how does an activist actually force force that if you're a shareholder, do you have the power just to nominate yourself on the board?

Alec: [00:20:15] Exactly like your AGL example? You know, every year shareholders as owners, owners of the business, get to vote on a whole bunch of different. Things at the company's annual general meeting, they can nominate new board members, they can vote on executive and board member pay and a bunch of other stuff. And so, yeah, shareholders have a vote and a lot of these ethical funds are choosing to use that vote. 

Bryce: [00:20:43] It's great to say so. The reasons we've covered off on the pros for investing ethically, obviously you can align it with your own values. Your money can make a difference. What are what are the arguments around actual returns on ethical investments? Obviously, we're in the investing game. We want to see some some returns with the money that we're putting in. Where does that sit when it comes to Astrue? 

Alec: [00:21:06] Yeah. So if those Firster arguments were about making change and money making a difference, the next two arguments are about your personal portfolio. So the first there is better returns. So The Guardian crunched the numbers. And over the last 10 years, the average annual return for a sustainable fund invested in large global companies has been six point nine percent a year, while traditional investment funds without an RSJ mandate have made six point three percent a year. So the returns for ethical investing historically have actually been a little bit higher than index or investing like the whole market. UBS did a survey of four hundred and fifty institutional investors and found that nearly 75 percent of the respondents to this survey agreed that investments that incorporate ESG factors perform better than equivalent traditional investments. And the time period they were talking about there is the three years before 20 20. So there's a general consensus that RSJ investments do better. 

Bryce: [00:22:16] Past performance is no indication of future performance, of course. 

Alec: [00:22:19] Yeah. And let's let's call a spade a spade. The big tech companies that have outdone everyone else recently fit in ESG screens because they're not that carbon intensive. And, you know, a lot of them are very well run businesses and they pay people fairly and all of that stuff. And people are 

Bryce: [00:22:38] going to make them fit. 

Alec: [00:22:39] And if if you're if you're excluding unethical investments, you're generally going to then be overweight, those big tech names. And if they keep doing what they're doing, you're going to do a little better. So that's probably an important caveat, but it makes sense as well. If you think about investing in where the world is going and you're excluding companies, this is particularly around climate change. You're excluding companies that are sort of where the world has been, oil companies, coal miners and the like. It makes sense that you're you're going to do better because you're investing in companies that seem to have more of a future. 

Bryce: [00:23:18] Yeah. Skate where the puck is going, as they say. 

Alec: [00:23:21] Yeah, exactly. 

Bryce: [00:23:22] And that kind of flows into the final point around investing ethically. And that's, you know, it gives you the ability to risk your portfolio in some way. You mentioned all those companies that the sin companies or the companies that particularly in the climate space, you know, they provide a lot of risk if you're investing in them. You know, there's government regulation that can impact them. There's all this activism that can impact them. You know, it's a a tough road ahead for these companies. And so taking a position in them is a risky approach compared to investing in perhaps some of these companies that are really trying to make positive impact on things like climate. 

Alec: [00:24:01] Yeah, the risk of owning a oil company or a coal miner these days is pretty large. And, you know, the AGL example that we've touched on a couple of times is a great example of that. Like there is there is so much risk over the last five years, 10 years, there's been so much risk in owning big coal fired generators because, you know, the energy grid is changing and, you know, coal is struggling in a world of cheap renewables and stuff like that. There's there's a bunch of like stranded asset risk and a whole bunch of different risk there. But if you think about ethical investing more generally. Tobacco companies, companies that make guns and stuff like that, like they're just a lot more likely to be regulated and, you know, in some cases regulated out of existence. So the risk point is kind of it's kind of clear when you think about like, what are the companies most likely to be forced to stop operating or regulated out of existence or just taxed and taxed and taxed? Yeah. 

Bryce: [00:25:08] So let's move to some of the arguments against and we'll put some our cynical glasses on. And the first sort of argument that often pops up Ren is that it's hard or perhaps it's difficult to tell how genuine company needs are when they say that they are taking a stand on RSJ or making changes within their company. Is it just a marketing ploy to attract investors? 

Alec: [00:25:34] Yeah, that is the argument both from companies themselves, companies saying, you know, we're really ethical, we're really sustainable, we're fighting climate change. But is that just greenwashing, not just marketing, but also for the investment managers, the funds and the ETFs? Are they just saying they're ethical, but they're not really. And that's an argument that, you know, in some instances has more merit than others. Like, there's definitely a big range of ethical investors out there, but that's that's one of the big arguments against it. And that really flows into the second thing, which is that this whole RSJ movement is a marketing exercise to justify higher fees. 

Bryce: [00:26:18] Absolutely. And you look at some of the funds that are in existence at the moment, there's no doubt that they do charge higher fees. 

Alec: [00:26:26] Yeah, and there's a reason that they charge higher fees. There's an extra set of work that needs to go on because you need analysts to 

Bryce: [00:26:34] come up with the framework 

Alec: [00:26:36] of this company. Yeah, you know, if we if we were running and Equity Mates ASX 200 index, we would literally go to standards and poor get the index and every quarter buy and sell a little bit and then just cruise for the next three months 

Bryce: [00:26:54] just cause that's what I've got to do to see

Alec: [00:26:57] if we were then going to do an ASX 200 ethical index, 

Bryce: [00:27:01] which we've tried. We tried on the show to try to build an ETF 

Alec: [00:27:05] on Equity Mates, but yes, 

Bryce: [00:27:07] very hard. 

Alec: [00:27:08] If we were going to do that, then we would need a whole team of analysts, every, you know, to be running around Australia and digging deep on these companies. And there's just an extra set of work. Absolutely. So, but but there's no getting away from the fact that they charge higher fees and, you know, fees can be hazardous to your wealth. Yeah. 

Bryce: [00:27:27] And then I think the final argument is that you can say if you're investing based on your values or if you're only going to be investing in companies that are involved in climate change, then of course, there's an opportunity cost when it comes to could you be making more money elsewhere? That's the, I guess, the pure economic argument. But of course, if you are investing ethically, it's unlikely that your primary concern is to make money. But it's just, I guess an argument that some people make is there's opportunity cost. 

Alec: [00:28:00] Yeah. And the classic example here, when we talk about opportunity cost are the tobacco stocks, because you would have thought that the regulation, the tax, the general public disgust with tobacco companies would have really hurt them as. Yes, yeah, but some of the tobacco companies, especially in the states, Altria, Philip Morris International, have performed incredibly well. Yeah, I like incredibly I hate it here. Yeah, yeah. Yeah. So that's OK. Well, Altria, I believe, is the best performing stock of all time. Wow. Yeah. Between nineteen twenty six and twenty sixteen they've delivered I think almost 18 percent compound annual growth rate. Wow. Yeah. Do your own research on that. No but and they just pay like stupidly big dividends now because like there's not a lot of growth in tobacco, although one of the tobacco companies this year bought a like an asthma inhaler company, which is a bit ironic given that they spent decades hurting people's lungs and now they're buying asthma. 

Bryce: [00:29:11] Like, let's just play both sides.

Alec: [00:29:13] Exactly. Yeah. Yeah. But yeah, that's the opportunity cost argument. Um, and then the final the final argument, and I think core to a lot of the critics of ethical investing is that they argue it just doesn't make a difference that Exxon is going to keep drilling for oil and keep, you know, trying to find new oil or that, you know, we've talked about AGL and their coal fired power stations, so let's keep talking about them. Detractors from ethical investing will argue that ethical investors didn't make a difference in what's happening with AGL at the moment, but it's actually that the market changed, that cheap renewables flooded the market and the coal fired power stations couldn't compete on price. And they started losing a lot of money. And ethical investors themselves didn't actually have any hand in that process. So that would be the argument. And, you know, there's some there's some pretty big names that don't support ethical investing. We had Scott Phillips from The Motley Fool on the show on Equity Mates, and he's not a fan of ethical investing. So there is two sides to this argument. Let's unless you've got anything more about the argument, let's talk about where we fall on it. 

Bryce: [00:30:27] Sure. Well, I'm happy to kick it off. Well, I think for me, I'm not on I'm not at the end of the scale where I am taking active approaches with my vote in in companies that I'm shareholders in and and really trying to push for change within companies. I'm not there yet. I don't know if I will get there or at what point I'll get there. I'm also not purely investing through ethical lens. So from an investment point of view, but I'm equally not invested in sin stocks in that sort of stuff. But but I think you're 

Alec: [00:31:06] more of a sin consumer.

Bryce: [00:31:08] No, no, no, no, no. But I think for me and it's great to see examples of it starting to really play out and really big fund managers now start to take a stance on this, because for me, in this space, money talks. And if you've got the biggest fund manager in the world, BlackRock, and if you've got shareholders who are now taking meaningful sort of stances within within companies to force change, people will will react to that. Companies will react to that because money talks. And I think it's all heading in the right direction. And I love to say it. 

Alec: [00:31:45] You do. You do love to say it. Money definitely talks. 

Bryce: [00:31:49] I think it's going to take a long time for it. You know, the actions of the world and and those in the BHP and all these companies who who are starting to sort of play in this space. But like, are they truly ever going to get to where a lot of people 

Alec: [00:32:05] you see them to? I reckon BHP is an example of a company that is moving pretty quickly in that direction. They sold their oil assets and merged them with Woodside. Yeah, yeah. Um, and I think they're moving out of coal or. Yeah. And they're instead moving to a lot of the, I guess, new economy, mining 

Bryce: [00:32:31] the big ones. For me, I think it's when you're going to have the banks and particularly the large investment banks, it's when they turn around and start saying we're not going to be taking positions in Saudi Aramco, we're not going to be taking huge positions in mining companies or oil companies. Or when we get to that point, I think, you know, we're going to be saying, OK, we've really hit a point of massive change here. But at the moment, you see a lot of these big banks say, oh, we've you know, we've Asturias. But all their underlying investments, a lot of their underlying investments are still pretty unethical. It shots fire, you could say. 

Alec: [00:33:11] Yeah, what's your views? So I have a bit of personal experience being in the company side of it. So when I was at Coles, I worked in the sustainability team and I felt the impact that an ethical a greater focus from ethical investors on Coles as a business had in my time, you know, when I started there was there was some great work being done in the team. You don't often think about Coles and sustainability in the same sentence, but I'm telling you, you should. But it was it was very much a part of the business that wasn't often thought about. And, you know, it was it was the same store sales growth and, you know, new formats and, you know, robotics and automation in our supply chain. Like they they were the the big talking points that investors were asking about and that the company was talking about. But even in the few years that I was there, like I saw my boss getting dragged into more meetings with investors and spending more time with our investor relations team, and our part of the business was brought more front and centre. And sure, there was like broader societal reasons for that. Like, every company is made up of a lot of people that live in society as well and were becoming more and more conscious of climate change and stuff like that. But specifically, ethical investors were asking those questions that they weren't asking before, and the company was forced to have answers for those questions. And, you know, we accelerated a lot of things, more renewables, big announcements on like solar farms and power purchase agreements, more focus on waste management, recycling, stuff like that. You could feel it. You could feel the I guess, the pressure that was coming from external investors. And, you know, I think there's no better example if we stay in the supermarket space. Your former employer, Woolworths, sold a whole part of their business, including one of the best retail businesses in Australia in Dan Murphy's, because they wanted to move out of pubs and clubs and their exposure to gambling. And I think broadband actually publicly came out and said that there was a lot of ethical money sitting on the sidelines that couldn't invest in Woolworths because of their gambling exposure. And also, Woolworths can now tap green funding markets like if they want to raise bonds, like if they want to sell it, if they want to borrow money from investors as bonds, they can raise green bonds rather than just standard bonds at a lower cost. Like there's there's clear examples where this pressure is working. And so for me, I feel like this debate feel like the world has kind of moved past this debate in some ways. And I acknowledge that a lot of people would disagree with me. And the most negative feedback we ever get about episodes is around because people feel very strongly on both sides. And so I'm sure we'll get some feedback. But for me, I feel like this debate has moved like there's too many examples of ethical funds and ethical investors making a difference in terms of what that exact mechanism is and exactly how that pressure is being transferred, being felt and then being responded to. Sure, there's some debates about that, but I think generally ethical investing makes a difference. 

Bryce: [00:36:39] You're right. There is no doubt that the train has well and truly left the station. It is now starting to really pick up steam. And yeah, it's a really, really interesting space. But also, as we're going to touch on in the next couple of episodes, one that can often be a bit difficult to navigate when it comes to making investment decisions. So we're going to try and help you unpack all of that over the next couple. So today we touched on why I think we set the scene, spoke about some of the arguments for and against and just hit close there with some of our personal views. And next week, we're going to be talking about how you determine what your priorities are, how you can find information about companies, and then actually call some experts within the Equity Mates network to ask them for their best resource for retail investors when it comes to ethical investing. So stick around for that, because that's going to be really exciting and important if you're looking to add some sort of ethical lens to your portfolio. Just a reminder as well that you can submit any question you'd like through to us or send us a message at or email And please keep in mind that we are looking ahead to the Get Started Investing feed summer series, where we'd love to hear all of your investing stories, big or small, wins, losses, whatever it may be. We want to hear them or dob in a mate who you think also has a good investing story. We'd love to have you on the show. Come and chat to our Ren and we won't buy it, I promise. But it's been fun as always. And we'll pick this up again next week. 

Alec: [00:38:16] Sounds good.

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