Do corporate ethics matter?

Lutheran, The, Mar 2004

It would seem so. Investors aren't willing to always turn a blind eye to unethical corporate practices, Costco discovered this in January when it received letters from shareholders that collectively manage $17 billion and hold more than 978,000 shares of its stock.

The problem? When Costco purchased land in Mexico, it allegedly ignored community concerns and environmental and cultural issues. Investors called for a policy on land procurement that incorporates social and environmental factors.

This attitude is backed up by a November survey of religious investors by Mennonite Mutual Aid. The poll found that 33 percent of respondents would dump a mutual fund that includes stocks from a company practicing unethical behavior.

The survey also discovered the top five business ethics concerns of religious investors: sweatshops, product safety, high executive compensation, environmental record and adult entertainment.