Ethical Money’s founder, Lee Coates, is one of the UK’s most respected experts in ethical and socially responsible investment. Lee has lectured internationally on the subject of responsible investment, has created some of the world’s most innovative and interesting responsible investment products and is one of the world’s highest qualified financial planners.
Lee, readers may be wondering why an organisation focused on ending animal experiments would be interviewing a financial advisor. Could you please explain how your work is connected to the aims of Humane Research Australia?
It is very simple really; if one is campaigning for an end to animal experiments, then what is the point of investing one’s money in those companies who undertake the testing? To financially benefit from the activities of a company that one is campaigning against makes no sense at all. Therefore, if one’s Superfund is invested in companies which are conducting or commissioning experiments on animals, one’s entire future and long term retirement will be based on the exploitation of animals.
Not only is this a complete conflict with one’s values, but it gives a very mixed message to the companies conducting experiments – we don’t like what you are doing but we do like the profits you make from it. As companies are legally bound to act in the interests of shareholders, if the shareholders are saying everything the company does is fine, then the company will carry on with business as normal. If people are unhappy with what a company does, they should disinvest and campaign continue their campaigning. It is possible to protest as a shareholder, but unless one gather support from a majority of shareholders this route is not effective. Better to disinvest and keep up the campagning.
Having a background in finance, was there any particular incident that first led you to pursuing a more ethical path?
During the day I wore my suit to the office, studied for professional qualifications and in the evenings I campaigned for animal welfare, justice and environmental issues. Work and campaigning were separate because I had no idea the two could be linked – and I was in the industry! I felt uneasy about the investment industry but couldn’t put my finger on what it was or how to solve it.
I changed jobs in 1987 and worked for a company which had an investment fund called ‘Stewardship’. I was told it was an ethical fund for Quakers and it was like someone had switched on a very bright (but low energy) light bulb. Suddenly I understood what my concerns were and how to deal with them – I would invest my money ethically. Within 2 years I set up a financial planning business which dealt exclusively with advising on ethical investment. It is now 22 years old and we still only advise those who wish to invest ethically.
In the early 1990s I developed the idea of Cruelty Free Money to ensure that those who lead a cruelty free lifestyle can invest their money in line with their principles.
How successful has Ethical Money been in the UK? Was it first considered a radical or unorthodox way of investing?
When starting my financial planning business in 1989 I was told it wouldn’t succeed – there weren’t enough people who cared about anything to invest ethically. 22 years and 5000 clients later, there are lots of advisers specialising in ethical investment advice and over 100 different funds available in the UK – including 2 Vegan ones (I established these in the early 1990s).
Investing ethically is accepted as a sensible alternative to the ‘me too’ strategies of mainstream funds. The UK Government’s research has concluded that there is no performance difference between investing ethically and mainstream funds – this was part of its work to encourage more charities to invest ethically.
The biggest handicaps to the growth of ethical investment are; mainstream managers trying to keep the status quo and not deal with the social and moral implications of what they do AND the general unwillingness of most people to accept that how their money is invested reflects their values – investing in animal exploitation is exactly the same as accepting and agreeing with the practice. Australians need to be better informed about what is done with their money and I am sure that more will stand up and invest ethically.
In a world where most wealth seems to have been made from the exploitation of others, how can a company like Cruelty Free Super be viable, let alone profitable?
It is true that wealth is often generated by exploitation, but ultimately this wealth is concentrated in a very few hands. the average person, even if they invest in exploitation via their Super (knowingly or not) doesn’t actually benefit from the exploitation. We only have to look at the GFC to understand this. A very small number of people made fortunes as a result of the GFC but ordinary people have had their lives changed for the worse or even ruined. So, I ask, how much did the average person make by investing in an unethical and exploitative way?
I call on every single person, investing for their future or the future of their children, to stop to think about who gets hurt, maimed and killed so that they can possibly ‘make a bit more’. If your retirement is funded via the exploitation of children or the abuse of animals, if you have any conscience at all it could be a long and uncomfortable retirement. So why not invest ethically and help other people whilst helping yourself too? Ignorance is not bliss, so take control of YOUR money and make sure it is making the future better and not worse.
What has been the reaction of Cruelty Free Super (CFS) in Australia?
After a slow start, things really accelerated. I think there was a view that CFS seemed too good to be true. Given the other options available before we launched, I can understand this. However, whilst CFS is new to Australia, it is based on 20 years of experience developing similar products in the UK.
In the 3rd quarter since launch, the value of applications received has doubled compared to the value after the first six months. In the run up to our 1st anniversary (10/10/11) the number of new members is growing every week from all across Australia. Interestingly, over 70% of our members are women and the majority of people are under 35 so we feel that this fund is very much a fund of the future – this is where the sensible money will be in the long term.
The most important things about Cruelty Free Super is that it is a fund designed for the customer and we wish to involve the customer in our ethical values and our marketing. It is the first fund to be concentrated on being marketed via Facebook/Twitter etc, and we ask all members to spread the word to likeminded people.