Principles of ethical investing

December 29, 2020 • 9:15 am

by Greg Mayer

Investment policies–that is, where and for what reasons individuals and organizations place their money–have been at times invoked as a way to either encourage good behavior or sanction bad behavior. The most prominent example I know of is the campaign for divestment of assets from companies that did business in South Africa, which took place during the late apartheid era. Apartheid of course did end; I don’t know what role the divestment campaign had in this outcome. I imagine it is something historians have studied, but I don’t know the conclusions reached. The most prominent such campaign now is directed against Israel.

For individuals, picking stocks, market timing, and day trading are generally bad investment strategies. (“Bad” in the sense that you can’t reliably make money that way.) But large institutional investors have enough money, time, and expertise to vet investments for the behavior of the companies and assets involved. CalPERS, the California state employee retirement and benefit system, which manages a portfolio worth more than $400 billion, for example, has a fairly detailed set of Governance & Sustainability Principles.

Last month, on November 13, I received the following message from the Society for the Study of Evolution (SSE), indicating that the Society wanted to develop its own set of principles. (I’ve removed links to SSE’s internal web pages and information about individuals.)

Dear Gregory,

Earlier this year, at the request of SSE Council and the Finance Committee, SSE formed a committee to develop a set of ethical principles to guide the Society’s investments, which have a current value of ~$4.3M (learn more on the Financial Reports page). The committee’s proposed ethical principles can be found in this document.

To develop this set of principles, the committee surveyed the principles of other societies and considered different elements of a policy that are consistent with the mission of the Society and the values of our community. The goal of the committee was to develop a set of principles, not to specify exactly how to invest, which will be determined based on these principles in consultation with our investment advisors. We also note that using ethical principles to guide investing does not necessarily reduce financial returns and may even increase them.

We value our members’ feedback on these proposed ethical investing principles. Your input will help Council decide how to manage SSE’s investments and overall financial plan moving forward. Would you be willing to review the 1-page principles document and provide feedback in a short survey?

Or click here to view the document:

Or click here to view the comments form:  We will be collecting comments until November 30th, 2020. Thank you for your participation!

The draft principles were as follows.

Ethical Investing principles

The Society for the Study of Evolution is committed to investing in ways that support companies whose business practices promote environmental sustainability and social justice and whose governance promotes transparency. The SSE will use these values to guide investment decisions.

Environmental values

The Society for the Study of Evolution favors investment in companies that

  • Foster the protection of biodiversity.
  • Contribute to preservation of a safe, liveable, and stable climate.
  • Avoid increasing the risks associated with climate change.
  • Limit the use and discharge of toxic chemicals and pollutants into the environment.
  • Encourage practices that avoid overexploitation of terrestrial, aquatic, and natural resources.

Social values

The Society for the Study of Evolution favors investment in companies that

  • Respect and promote human rights, dignity, and well-being.
  • Protect personal data and respect customer privacy.
  • Foster an inclusive environment for all workers regardless of background or personal characteristics.
  • Improve and adopt anti-racist policies.
  • Follow practices that respect the dignity and rights of workers, including the ability for collective action by workers.
  • Strive to reduce disparities in economic and educational opportunities.
  • Respect the autonomy and voices of local communities and indigenous people.

Governance values

The Society for the Study of Evolution favors investment in companies that

  • Have a Board of Directors reflecting the diversity of communities they serve.
  • Ensure that financial reports are regularly reviewed by external auditors overseen by Board members who are not employed by the company.
  • Follow international standards to guard against fraud and corruption.
  • Commit to fair wages and equitable sharing of profits.

I wrote back to the Society on December 23:

When I received your invitation to participate in a survey concerning proposed investment principles for SSE, I began filling out the survey, with my initial response being that it was OK, but with minor changes. But as I attempted to compose a response, my “but” overwhelmed my “OK”, to the point that it became hard for me to see how the entire notion of a set of principles could survive.

Some of the principles are straightforward accounting principles– using external auditors, for example. The “Environmental values” do touch on some areas in which SSE could be said to have expertise– evolutionary biology is, after all, the study of the temporal and spatial patterns of biodiversity and the processes that generate them. But I note that these values are expressed without any endorsement of specific policies. “Foster the protection of biodiversity” is sufficiently broad that it might be a worthy principle to endorse. Ariel Lugo, who maintains that introduced species foster biodiversity, and Peter Marra, who argues that introduced species are a great threat to biodiversity, could both agree. I happen to think Marra is nearer to right on this, but I wouldn’t want the SSE to proclaim one or the other. On biodiversity, evolutionary biology does have disciplinary expertise, and intellectual standards for the evaluation of evidential support for propositions, so I could see some reason for the SSE to have something to say in this area.

But many of the proposed principles lie far afield from the values of science in general and evolutionary biology’s particular expertise. And it’s in those areas where evolutionary biology has the least to say that the principles try to say the most. Three examples.
“Improve and adopt anti-racist policies.” Anti-racism, sadly, is not opposition to racism, but a particular racialist ideology espousing an essentialist view of “races”, according to the ideology’s own notions of what “race” means. Anti-racism, which is fundamentally racialist, is sometimes even overtly racist. SSE should have no position on “anti-racism” whatsoever.
“Follow practices that respect the dignity and rights of workers, including the ability for collective action by workers.” ​I personally believe that the decline of unions has been a major factor in the growing concentration of wealth in the hands of a very few in the United States, and that this lack of equitable distribution of the fruits of economic progress is the greatest problem facing the United States. Its solution is of the utmost consequence for the future of the country as a democratic republic. But why would SSE have a position on this? If an evolutionary biologist in the United States supports his state’s anti-union “right to work” law, this has no necessary relation to his work as an evolutionary biologist. Why should such a person have his political views on an issue unrelated to evolutionary biology be repudiated by SSE? I don’t expect or want SSE to endorse my views on “right to work” laws, and I equally don’t want it to condemn the opposite view.
“Respect the autonomy and voices of local communities and indigenous people.” ​This is perhaps the most bizarre of all. Why should SSE have a view about the proper relations between levels of government? Are local communities always, or even usually, right about political, social, and moral issues? South Carolina wanted local autonomy over slavery in 1860. During the civil rights era, it was Federal override of the autonomy of local communities that brought about social progress. And what about today? We’ve seen wealthy local communities put up gates and threaten protesters with weapons– is that what SSE respects? And what about the wider world? Does SSE have an opinion on the fate of Nagorno-Karabakh, many of whose local residents want to be annexed to Armenia? The indigenous people of Hungary seem eager to keep out refugees– it’s their blood and their soil– does SSE respect this, too? Whether local autonomy or higher-level intervention has done more to bend the moral arc of the universe towards justice has varied from time to time and place to place. SSE need not engage with the question of under what circumstances local autonomy promotes justice, because it should have no opinion or policy on the matter at all.
There is, of course, a sort of reductio ad Hitlerum– “You wouldn’t want to invest in Krupp gun works or the makers of Zyklon-B during World War II,”– and, of course, you wouldn’t. But extreme cases make bad law, and do not provide a basis for the proposed principles.
A scientific society may legitimately advocate for science and for scientific values, especially as they pertain to the disciplinary expertise and intellectual standards of the society. But it is no part of the remit of such societies to take up positions on general social, political, and moral issues. Indeed, one of the values of science is to not allow popular passions, fashions, and prejudices to color what should be epistemic considerations.
I realize that this comes after the deadline of November 30, and thus will not influence the form of whatever policy you adopt; the response timeline, coming as my campus prepared to move to all virtual instruction over Thanksgiving, did not leave time for a considered response given my other commitments at that time. With the semester now over and with time to address the issues, I share my views with you in the hope that they might add to your understanding of them; feel free to share this with your colleagues among SSE’s officers and committees.

I received a cordial reply saying that all feedback will be considered.

Some sort of policy, such as following accounting principles, is desirable, but that sort of policy almost goes without saying. (I belong to several scientific societies; I don’t know what, if any, formal policies the other societies have.) But such a policy should address universally accepted accounting and governance principles, and perhaps concerns for which the Society possesses special disciplinary expertise and intellectual standards.

Have any readers encountered similar quandaries with organizations and institutions with which they are involved?

Wallace Year updates

May 2, 2013 • 5:51 am

by Greg Mayer

UPDATE: Bill Bailey’s Wallace programs are available on Youtube here and here (thanks to Alex and ant for the links); and George Beccaloni has stopped by in the comments to let us know that there is a campaign to buy Wallace’s house for use as a heritage and study center– so now even not well-off Wallaceophiles can help preserve the house by pooling their resources.

This year is of course Wallace Year, the 100th anniversary of the death of Darwin’s great friend, colleague and co-discoverer of evolution by natural selection, Alfred Russel Wallace. A few brief updates on Wallace Year goings on:

First, the Society for the Study of Evolution‘s annual meeting this year, to be held June 21-26 in Snowbird, Utah in conjunction with the American Society of Naturalists and the Society of Systematic Biologists (I’m a member of the first two, and was a long time member of the third, but my subscription got screwed up when they changed printers at one point and I never straightened it out), has adopted a Wallace Year theme.

The Evolution 2013 Logo.
The Evolution 2013 Logo.

Wallace was a spiritualist in later life, and thus would, I think, have appreciated his own spectral visage overlooking the Evolution 2013 meetings.

Second, The Dell, the house that Wallace built in Essex, and lived in from 1872-1876 is up for sale, listed at GBP 1.5 million. It’s a fine opportunity for the well-off WEIT reader with a passion for the history of biology– don’t forget to invite me for a visit! There’s lots of neat information about the house (and other things Wallace) at George Beccaloni’s Wallace site, including pictures– go explore!

Wallace's House
The Dell, Essex. My guess would be that the tennis courts are a later addition.

And finally, two programs about Wallace hosted by the English comedian Bill Bailey, Bill Baileys Jungle Hero: Wallace in Borneo, and Bill Baileys Jungle Hero: Wallace in the Spice Islands debuted on BBC2 last week. I don’t think they’re available in the US, but UK readers can view them here; more on the shows by George Beccaloni here.

Bill Bailey admires an arthropod.
Bill Bailey admires an arthropod.

h/t Dominic