Based on ideological reasons,
political sentiment and public responses became important determinants in
making investment decisions. One such scenario was the war in Vietnam,
which should be considered as one of the major turning points for Socially
Responsible Investing.
After polarising society in the
U.S., the war brought up an ethical dilemma among American universities
and religious bodies about the decency of their investments. It was an
obvious development for them to raise the question of “whether they should
(a) own shares in companies supplying war materials, and (b) whether they
should use their power as shareholders to force change” (Sparkes 2002).
Hancock (2002) notes that one of
the issues, questioned by these anti-war groups, was the morality of
producing materials such as Agent Orange, the defoliation chemical used to
destroy ground cover (jungle) for Vietcong troops. This raised the
submission of the first socially responsible resolution in 1969. Agent
Orange was suspended in 1971 after discovering anomalies and defects on
laboratory animals caused by this substance.
In conclusion, the Interfaith
Center on Corporate Responsibility and the Pax World Fund were
subsequently established as a reaction to the demand for profitable
investments in companies that were not related and did not benefit from
the war in Vietnam. Other funds also started acting by appointing security
analysts to compile “peace portfolios” of corporations with the least
involvement in the Vietnam War; such reports were highly demanded by a
number of churches and other community groups (Entine 2003).
The issue was raised worldwide and
these concerns affected the awakening of moral awareness within investment
industries. It was also an incentive for the UK investment industry to
start thinking about putting some social and ethical considerations on the
investment agenda. What began as a fringe movement in the investment
industry appealing to only a limited band of anti-Vietnam War activists
slowly moved into the mainstream (Miller 1991).
