The Truth About Ethical Investing

[bigdude]

The Truth about Ethical Investing

On Jan. 28 at the World Economic Forum in Davos, Switzerland, a Canadian magazine and Innovest, an investment research firm specializing in corporate social responsibility, released a list of the "100 Most Sustainable Companies in the World." In the words of the press release, these were the "one hundred companies most open to leading the way to a more sustainable world."

On the face of it, this should have been a watershed moment. Corporations that disavowed the word "sustainability" not so many years ago were proudly showcased at the world's most prestigious conference dealing with corporate issues.

Near the top of the alphabetical list was ABB Ltd (ASEA Brown Boveri), a one-time promoter of mega-dams including the Narmada dams in India and the Arun Dam in Nepal. On July 6, 2004, ABB settled a U.S. Federal Court action for bribing government officials in Nigeria, Angola and Kazakhstan, paying $5.9 million in ill-gotten profits. On the same day, it pled guilty to violating the anti-bribery provisions of the U.S. Foreign Corrupt Practices Act (FCPA) and agreed to pay $10.5 million in fines. In Nigeria, ABB paid illicit bribes to officers of NAPIMS, a Nigerian government agency, to evaluate and approve bidders for oil and gas contracts. In Angola, it was doling out money in brown paper bags to government employees. Meanwhile, the U.S. Justice Department continues its ongoing investigation of still more corruption.

Moving from A to B is Bristol-Myers Squibb, under investigation by the SEC for violating the FCPA in Germany following prosecutorial action there. The company was fined $150 million last year by the SEC for cooking its books; it paid $135 million in claims and settled with the Federal Trade Commission on charges that it conspired to prevent the cancer drug Taxol (which was developed by NIH and U.S. taxpayers) from becoming generic after patent expiration, costing women with breast cancer hundreds of millions of dollars (Bristol-Myers Squibb was charging $6.09 per milligram compared to foreign generic producers charging $.07 per milligram). It also paid a $535 million settlement to 29 states to settle litigation over whether it had illegally blocked generic production of BuSpar; and Bristol-Myers Squibb joined with other big pharmaceutical companies in lobbying for a provision in the new Medicare regulations prohibiting the U.S. government from negotiating with drug companies on bulk purchase discounts for drugs, what used to be called price-fixing.

Oil, gas, beer, mining...?

This has got to be one of the biggest con jobs perpetuated on well-intended investors, somewhat similiar to the Green Party con job being perpetuated on Canadian voters.

Get a play-at-the-heart buzz word in your title and you are home free, well almost.