BIG MONEY NEEDS ETHICAL RATINGS AGENCIES TO STOP IT DOING HARM

Anyone who has large amounts of money under their control is in a position to shape the course of change and yet fund managers understand their responsibility to be only that they should maximise returns while staying within the law. Is this amorality immoral? Is it real or is it a convenient lie that hides an extreme right wing agenda?

People who run businesses that make and do things often have a vision that goes far beyond simply maximising profits. Often they want their work to help make the world a better place as they see it. This 'soft' motivation is not something they can ever dare to admit to unless they are either going for an ethical sales pitch or are just extremely successful. If they do they are likely to find they are cut off from finance. The money always wants a clean clear focus on profit and lets the law deal with the moral issues. Never mind that the money also lobbies the law makers not to take away profitable opportunities even if they kill people or endanger life on earth. It is against this background that we have food and drug companies poisoning people, arms and security companies creating the tools for mass murder and torture and mineral extraction companies trampling on both people and planet with near impunity. However, none of these horror enterprises could operate if they did not have access to the finance steered their way by fund managers. Their code of amorality within the law is not neutral. It is biased in favour of people and corporations that will put profit before the common good and yet these fund managers are the people we entrust with our savings.

This has been going on so long that many developed countries and sadly the UK in particular, have economies that would collapse if any meaningful moral standard were applied to investment. Governments are highly aware of this and have become increasingly complicit. Fiscal policy, regulations and enforcement as well as government expenditure are all distorted by the 'keep the cash cows alive' agenda. Tax on corporate profits and the very rich is increasingly voluntary. Big companies may be fined, but are not taken to court. The public purse is for bail-outs and creating corporate investment opportunities to protect immoral sectors that have become bloated in an environment of collusion and complicity with governments. The intellectual deceits to justify all of this have become the banal dogma of the established political parties, university academics, mainstream media and the corporate world itself.

For ordinary people living in this environment there is hardly an opportunity to gain a realistic perspective when this web of constructed meanings forms the language of everyday life. Only the key symptoms tell people that things are not as they should be: they are getting poorer while the rich get richer, the world is increasingly in conflict, freedoms are being taken away, debts are piling up and nothing effective is being done to address climate change or our dependence on the depleting fossil fuels that cause it. The idea that their problems are being fuelled by the money they invest in pensions and ISAs does not often cross people's minds. Nor does it often cross their minds that each time they borrow money, for homes, for student loans or on their credit card that they expand the mountain of private debt that is too big to be ever repaid, but which can be used to enslave them by depriving them of any choice but to always take any job regardless of how badly paid or how mindless or immoral the work is. What good does it do anyone to even think of these things, or to consider the vast funds that are created from the profits on oil and gas that sweep across the globe with the morality of pirates in search of booty? Each of us is dependent on this web of corruption and exploitation to keep us housed, fed and safe from the chaos that would ensue from its collapse. Never mind that in some respects our system is as full of lies and corruption as that of the Soviet Union.

If investment without moral consideration of the consequences of investment is a key component of the problem, is there a realistic way that fund managers could be held responsible for the damage that the companies they invest in do in the course of maximising profits? Just as we have ratings agencies for the credit worthiness of businesses, could we not also have ethical rating agencies?  Could fund managers be obliged to subscribe to a code of practice where their portfolios needed to have a calculated ethical mean score above a certain level. If such a system were in place, we would have seen a collapse in the share price of Barclays once they were found guilty of the Libor fix. GSK's shares would have collapsed after the company was found guilty of miss-selling drugs. Companies, particularly large ones, found guilty of bad practice would not just be able to pay a fine and carry on. They would become subject to a takeover by companies with a better ethical scores. The transition to higher ethical standards could be taken slow enough that the economy is reformed, not destroyed, with the score required rising year on year. Obviously, such a system would require enforced transparency and the ratings agencies would need a high degree of independence and moral authority, but if they were to be able to assure savers, investors and consumers that their transactions were not undermining their wider best interests, it might be a way forward.