Ethical Investing: Goodments’ CEO on how men and women view ethical investing differently
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In this week’s series on Ethical Investing, Stockhead spoke with Goodments co-founder Tom Culver. His company helps people invest in companies that match their own environmental, social and ethical values.
And yes, that is their customers’ own values rather than any set by Goodments because everyone has different views on what is ethical.
The most fascinating insight Culver had to offer was in regard to how much men and women differed in what they wanted.
“From a female perspective there’s supporting agendas that focus on diversity, equality, development and human rights,” he said.
“Males are more focused on renewables, clean energy and clean tech as well as CSG and corporate transparency.”
But what about what they want to avoid?
“Women are more inclined to avoid societal issues like tobacco, alcohol and predatory lending,” he said. “Guys are slightly different – they avoid binary things like fossil fuels and weapons.”
On the other hand, Culver said there was “absolute parity” between the sexes on a few issues.
One was animal testing. He called it one of the most avoided behaviours by his customers along with tobacco.
“It’s a massive concern for our customer base, young or old, male or female and that results in the businesses that these customers are or aren’t investing in,” he said.
“Even some of these firms doing fantastic things about cancer treatment are avoided because of the way they practice their testing.”
Another was big tech. Concerns about privacy and employee treatment has meant Goodments has seen little investing in Facebook or Google. This even extended to this year’s IPOs – Slack, Uber, Lyft, Pinterest and Zoom.
Culver put this down to the limited disclosure approaches and how they treat their employees.
But he added: “If you look at other IPOs like Beyond Meat and Levi’s that are very focused around a futuristic view of the planet – those businesses have been incredibly well adopted.”
But gender was not the only trait that determined what one wanted – it was age. It turned out younger customers were more fussy, Culver said.
“Younger customers have a pilfer of issues to get across.”
Older customers on the other hand, possessed more broad views about the legacy they wanted to leave.
“What we see from talking to our older customers is they’re thinking about that legacy,” he said. “How will my investments impact my children’s generation? What is their future?”
This was not to say younger people didn’t care about future generations.
Culver noted that “both end up at different points – just at different angles”.
As Culver noted, people may think if you screen for ethics as well as finance it’ll cost you more or your company will perform worse.
Some may even dismiss it as a “millennial fad”. Although one could argue it’s just the least awkward way to avoid a conversation about something they haven’t researched.
Yet Culver argued the theory that ethical investments perform less was false and attributed this to the performance impact ESG metrics can have.
“Risk is a big one and you can sometimes think about sustainable investing – what is tommorrow’s world going to look like?
“It aligns to clean energy, clean technology fully transparent companies.
“You’re going to say that’s non-sustainable – left with dead assets that’ll cause huge risk and potential litigation down the line. So those companies have been excluded and punished – and we think rightly so.
“Even diversity and equality – we now see all of those things actually lead to better share price performance because there is less turnover and risk to market,” he said.
Stockhead also spoke more generally about Goodments’ position at present. Goodments generates revenue from subscriptions rather than brokerage.
“You can trade as much as you like without feeling you’re restricted or its going to cost you,” he said. “We’re trying to encourage engagements – the more you do the cheaper it gets.”
Culver said things were going “fantastically”, with two key goals laid out ahead this quarter.
“First is that we are launching an advisor centred product, designed for accountants and brokers and that’s to support the advisor market discussing sustainable investing,” he said.
“The problem isn’t that they or the clients don’t want to – it’s that they don’t know how to engage the conversation.”
Second, it will expand into international markets.
This will start with the bringing of UK customers onto the Australian version of the app.