How to Invest Your Money with a Clear Conscience: The Canadian Guide to Profitable Ethical Investing

Barbara Jones McLellan specialized in economics and ethics in Vancouver.

Eugene Ellmen has written this book with an eye on the novice ethical investor. A business reporter contributing to Canadian Press’s weekly finance column, “Money Monitor,” he explains the topic of ethical investments by providing descriptions of various instruments of investment, their uses and their alternatives. The book, unfortunately poorly edited, was written after the October 1987 market crash, and also includes some of the 1988 tax changes implemented by Michael Wilson.

Basically, Ellmen attempts to introduce options for investment which many perhaps never consider, mainly because of a lack of familiarity with them. His purpose is to take the fledgling desire to act according to one’s conscience and to explain various instruments and criteria through which this may be accomplished. To this end, he describes how credit unions operate and how they can be a source of innovative community development. He further describes the workings of RRSPS, and ethical considerations in the choice of their form and the institution which offers them.

Having dealt with these immediate concerns of personal banking and saving for retirement, Ellmen moves on to a more specific discussion of alternatives for speculative investment in mutual funds, the stock market in general, and what he calls “alternative funds.” He briefly explains how one might choose from a myriad of options according to ethical criteria.

Finally, Ellmen devotes a chapter to the practicalities of financing a leave of absence from one’s work in order to pursue community or personal interests, and to the difficulties of finding a financial advisor compatible with one’s own ethical priorities. The appendices list various funds, credit unions, resource organizations, and even existing ethical guidelines under which some funds operate, as a preliminary network to which to turn.

This book would perhaps best be of use as a supplement to discussions of ethical investment issues themselves. How to Invest Your Money With a Clear Conscience assumes that the reader has already thought through what it means to choose according to conscience. The person looking for direction in making ethical choices will have to read between the lines of this book. Ellmen himself favours those institutions which support local communities, favour consumers, offer opportunities for democratic ownership, or innovate in their labour relations. He also seems to circumscribe ethical choice. It consists of the individual choosing the contents of his or her investment portfolio, keeping tabs on the social record of each institution, and voicing disagreement by letter or proxy when necessary.

Unfortunately, Ellmen leaves unanswered some of the most interesting ethical questions that he raises. In the case of RRSPS, is the government actually subsidizing those with higher incomes, with less need of help for their retirement years, more than low income earners? Can one make a positive ethical RRSP investment if this is the case? Is it appropriate for government to use tax shelters to achieve policy objectives when these again provide benefits only to high income tax payers? These questions indicate that the issue of ethics is more complex than the simple choice of investment instruments. It penetrates to the heart of both economics and politics in Canada.