The LA Times exposes the Gates Foundation as an unethical investor. Read the article – it’s shocking. They are trying to do all this good in the world, and at the same time they have their enormous assets invested in companies that make people sick, are heavy polluters, and grossly overprice the very pharmaceuticals that are most helpful in the number one priority of the foundation: the fight against AIDS.
According to the article, the Gates Foundation has at least 41% of its assets invested in companies that are notoriously non-ethical. That includes investments in 69 of the top 100 worst polluters in the US and the top 50 worst polluters in Canada (based on 2005 figures).
They are not alone – many other philantropies are invested this way – but while some of the other foundations have become activist shareholders, pressuring the companies they invest in into changing their ways, the Gates Foundation instead is planning to institutionalize the ‘firewall’ they have set up between their investment arm and the part of the foundation that hands out grants by splitting the investment arm off in a separate trust. That way, the investments will not be ‘hampered’ by the policies of ‘doing good’.
The Gates Foundation has the opportunity to set an amazing example by choosing to invest ethically. I hope they will change their ways, but I must say I’m not holding my breath, given the people that are involved.
If you want to become part of the solution rather than the problem, Socially Responsible Investing (SRI) or Ethical Investing is really not that hard. Check out this Morningstar article, and this NRDC one. Do you have a 401K or an IRA? Consider investing them responsibly. If you have a money market account, check out Domini Funds, they offer one with competitive rates. Domini has several SRI funds as well.