Other ethical issues
In this section:
Alcohol
Contraception and abortion
Gambling
Pornography and adult entertainment services
Tobacco
Alcohol
The issue
Although alcohol can be consumed without harm, it is also a toxic and addictive substance which causes illness, accidents, violence and family suffering.
As evidence of the health risks associated with alcohol consumption becomes more widespread, manufacturers have sought replacement consumers and launched new products. The drinks industry has been criticised by campaigning groups such as Alcohol Concern for targeting young or under-age drinkers.
Its relevance for charities
Alcohol has been a long standing concern for some charity investors who are opposed to it on moral and religious grounds, for example Muslim and some Christian organisations. Health, welfare and social service charities are also often concerned about this issue owing to its health and social effects.
Incorporating the issue into investments
It is possible to apply negative screens in relation to alcohol. This can be focused on companies that manufacture and/or sell alcohol products. A materiality threshold can be applied – for example avoiding only companies that derive 33% of turnover from alcohol sale or manufacture.
It may also be possible to engage with companies – for example, to assess how they are addressing issues of binge drinking.
A number of common investment funds, and other pooled investment funds, incorporate an alcohol screen, reflecting its prominence as a concern amongst charities and faith groups. The materiality threshold used by CIFs varies.
Contraception and abortion
The issue
The issue of termination of pregnancy has remained controversial in recent years. The parameters of this debate vary greatly from country to country. Attitudes to the issue may be affected by religious beliefs, and views on the rights of women.
'The right to choose' -- those in favour of women being entitled to have abortions generally argue that a woman should have control over her own body, and the right to decide whether or not to terminate her pregnancy. They also call for improvements in sex education and in contraception.
'The right to life' – those who oppose abortion generally argue that human life is sacred and that aborting a foetus is effectively the taking of a human life. They generally believe that life begins at conception or shortly after. Therefore if an abortion is performed at any stage they would deem it as the destruction of life. Some opponents of abortion accept there may be exceptions to this rule such as rape victims or the pregnancy of very young girls, or the case of inherited conditions, such as Down's syndrome.
A separate, but related issue is that of contraception. A number of organised religious groups, most notably the Roman Catholic Church, believe that most forms of contraception are unacceptable, including birth control pills and condoms. Others, including many opponents of abortion, favour contraception, often as a means to control the spread of sexually transmitted diseases and HIV/AIDS or to improve maternal health.
Its relevance for charities
This issue may be of concern to some faith groups, particularly those linked to the Roman Catholic Church.
Incorporating the issue into investments
This issue could be the focus for positive or negative screens. Companies may be selected for investment according to factors such as:
- whether the company produces abortifacients
- whether the company produces contraceptives
- whether the company offers healthcare services or information which may relate to abortion
This could also be the focus for engagement with companies.
There are examples of pooled investment funds which apply screens in relation to this issue.
Gambling
The issue
Gambling has long been a cause for concern amongst ethical investors. With the advent of the National Lottery and the deregulation of the UK gambling industry there have been claims that addiction to gambling is on the increase in Britain.
Interest in gambling has been highlighted by recent concerns over the increased accessibility of gambling, particularly through the internet and interactive TV, and the discussion over the development of a super-casino’.
Its relevance for charities
Gambling is a concern of many charity investors who are opposed to the activity on moral and religious grounds. Social service charities, particularly those dealing with addiction and its social impacts, are also often concerned about gambling.
Gambling concern groups, church bodies and the medical profession have criticised the lottery for encouraging compulsive behaviour, greed, poverty and illness. Children’s organisations have also been critical of the lotteries for encouraging under-age gambling.
Incorporating the issue into investments
It is possible to apply negative screens in relation to gambling, screening out companies involved in gambling. A materiality threshold can be applied – for example avoiding only companies that derive 33% of turnover from gambling. This can include companies involved in the National Lottery.
It may also be possible to engage with companies – for example, to assess how they are addressing issues of under-age gambling.
A number of common investment funds, and other pooled investment funds, incorporate a gambling screen, reflecting its prominence as a concern amongst charities and faith groups. The Database of funds and fund managers provides some examples.
Pornography and adult entertainment services
The issue
Objections to pornography have traditionally centred on its tendency to ‘deprave and corrupt’. Current opponents of pornography argue that it is degrading to both men and women, transmitting the message that women are sex objects available solely for male gratification without any form of emotional attachment. Recent research has provided evidence suggesting that it is likely that pornography can be one of the factors that contribute to sexual violence and sex discrimination. There has been rising public concern recently about Internet pornography, especially child pornography which is illegal, and also worries about children using the Internet and accessing offensive material.
Its relevance for charities
Religious organisations and charities working on social welfare issues may find this issue of most concern.
Incorporating the issue into investments
It is possible to use negative screens to avoid investing in companies involved in pornography or adult entertainment services. This could specifically relate to companies which
- publish or wholesale pornographic magazines or newspapers
- distribute cut 18 certificate films or videos
- provide adult entertainment services (such as adult entertainment TV programmes or channels, table-dancing or lap-dancing, and sex shops)
It may be possible to engage with companies on this issue – for example to determine the involvement of mobile phone companies in the distribution of pornographic material.
Some common investment funds and other pooled investment funds apply criteria in relation to this issue. The Database of funds and fund managers gives some examples.
Tobacco
The issue
Over recent years, the tide of public opinion in Britain has turned against smokers. Tobacco is the largest cause of preventable death in the UK, claiming over 100,000 lives every year. It is responsible for at least 90% of deaths from lung cancer, chronic bronchitis and emphysema, and it is a factor in over 20% of all deaths from heart disease. A decline in adult smoking and fears about the effects of ‘passive’ smoking in particular, have encouraged smoking to be banned in many public areas such as pubs, restaurants, offices and on public transport. Some smokers, however, see such moves as an attack on their civil liberties.
The tobacco market is still a significant size and is open enough for further product proliferation. Although cigarette prices have risen following government attempts to reduce smoking by increasing duty on tobacco products, new brands have continued to appear on the market, and cheaper ‘own-brand’ cigarette sales are on the increase.
Its relevance for charities
The significant health impacts of tobacco may be of interest to all charities, but will be of most concern to health charities.
Incorporating the issue into investments
It is possible to use negative screens to avoid investing in companies that produce or sell tobacco. It is possible to focus only on tobacco producers, or apply materiality thresholds to exclude only those companies that derive a particular proportion of their turnover from tobacco.
It may be possible to engage with companies on tobacco issues – for example in relation to the marketing of tobacco in the UK or developing countries.
Tobacco is the most common negative screen used by common investment funds and other pooled investment funds. The exact criteria applied may vary. The Database of funds and fund managers gives some examples.
