Eco Investor February 2015

Editorial

The Power of Ethical Consumers

One of the most interesting articles I read over the summer holidays was a piece by Sally Young in Fairfax Media about how a group of young Sicilians have been able to do what "police, the courts and politicians have been largely unable to do for over a century – stop the Mafia".

They did it by starting a campaign called Addiopizzo or "Goodbye Pizzo". Pizzo is protection money. They started with posters, then a web site, then an Addiopizzo logo for shop windows so consumers would know that those shops were not paying protection money to the Mafia.

In 2005 Addiopizzo got a big boost when it published the names of 2,500 consumers who had pledged to support Mafia-free businesses. Despite the risks, the movement is growing and it now has 800 organizations in its guide to Mafia-free shops, over 1,000 businesses display the logo, and 10,000 consumers have joined its "I pay those who don't pay" campaign.

It's a wonderful story about the power of the ethical consumer. I include ethical and environmental investors among them as investors are consumers of financial products.

Fortunately in Australia the consumer does not have to try too hard to avoid the Mafia. But there are plenty of other ethical choices that need to be made.

For my own part, I have been watching my own ethical choices for quite a few years and late last year I put them in a list with the thought that perhaps I would write about them. My list covers both consumer products and investment products.

On retailing, one thing I really don't like is mega-monopolies and oligopolies, so for years I have avoided shopping at Coles and Woolworths and instead shop at Aldi and IGA. I also don't like the way that Coles and Woolworths are gradually taking over the supply chain with their own brands, and have moved into other retail areas such as fuel. I'm put off by Woolworths' gambling machines and the coal assets owned by Coles' parent, Wesfarmers. On the positive side, I like Aldi's low prices and that IGA is often the only supermarket in many small country towns that are too small for Coles and Woolworths.

For many years I've bought free range food including eggs, chickens, ham and bacon. I'm proud to say that many times I asked my local IGA to stock free range ham and bacon and they eventually did. That also meant that I didn't have to get them at Woolworths. I choose farmed fish when available such as Tassal and Huon Aquaculture salmon, and for a while I tried organic fruit and vegetable shopping but lack of parking makes it difficult in my area.

At present there are not a lot of cruelty-free food options on the ASX, but the sustainable and organic food sector is growing and I am happy to look at the IPOs and options as they arise.

On the investment side, I do not buy shares in Coles and Woolworths and am a shareholder in Metcash, which owns IGA, and in Tassal.

With media, I avoid Murdoch Media products and prefer Fairfax Media newspapers and web sites, the ABC and SBS. This is despite Rupert Murdoch having been a bit of a media hero of my youth for the way he built a global media business and supported a national newspaper in our small country. I was eventually able to get over the way Murdoch treated Whitlam in the 1975 election, but I cannot get over the UK phone hacking scandal, his extraordinary media concentration in Australia, the way he uses his media outlets to pick prime ministers, and the way his media treated Rudd in the 2013 election.

On the investment side, I do not invest in News Corporation. I have been a past investor in Fairfax Media and would do so again if I thought it and the media sector were good investments.

On energy, I was once a client of AGL Energy and Origin Energy but now I avoid them and our electricity comes from Momentum Energy, which is owned by Hydro Tasmania. Our hot water is solar.

On the investment side I have been a past investor in both AGL and Origin but both have been off my list since they got into coal power big time a few years ago. I have invested or am currently invested in clean energy companies including Mighty River Power, Meridian Energy, Infigen Energy, Energy Action, and innovative speculative stocks such as Carnegie Wave Energy, AnaeCo, Dyesol and some others.

I would really like to avoid oil companies and hope that one day I can afford an electric car. It needn't be an expensive Tesla either. A city run-around like a Leaf would be more than enough. For me, that would be a big ambition come true but for now it's a project for the future or maybe my super.

My preference for diversity also extends to politics where I am a long time swinging voter, and to religion where I am philosophically eclectic.

These cover my main likes and dislikes as an ethical consumer and investor. Writing them down has been useful personally and it would be interesting to know how they are similar and different to other people's.

With time I have become more convinced about the power of positive choice and that conscious consumerism, of which environmentally positive investing is part, is a practical way to a better society. Although one consumer won't change the world, it's good to know that when enough like-minded consumers get together they can tackle big crime, big government, big oil, big coal, big media, big retail or just about big anything.

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