Reed Investment Club debated last week what their ethical responsibilities are when buying stocks. The previous week, the club voted to invest in Marathon Oil Corporation, a company that refines, transports and sells petroleum products. This investment was pitched by investment club Vice President Ben Scott.
Club member Maggie Davis called for the discussion, wanting to be more clear on what kind of thetical responsibilities the club has.
Davis noted that there were two different views expressed when the club was discussing investing in Marathon: first, the fact that Marathon doesn’t have any carbon reserves but rather just processes and transports them meant the investment was not directly contributing to climate change; and second, that even if investing in an oil company was ethically wrong, that doesn’t matter.
“The approach I was trying to present is that us purchasing a small fraction of these shares does not in any way contribute to climate change, regardless of what the company is or isn’t doing,” Scott said. “So even though they do contribute to global warming with their oil refineries that have terrible emissions, presumably, whether or not we own those shares … is of no difference to the company and of no difference to the atmosphere.”
The group first discussed whether the primary goal of the club is to profit, or learning, and whether considering ethical considerations would undermine those goals. They discussed potentially adding to the charter language about ethical responsibilities.
Some members did not like this idea, suggesting that it would not be good for ethical choices to be forced on the members of the group.
“I strongly recommend against including coercive elements or injecting coercive elements into the charter,” club member Aristo Spanos said.
Some also suggested that this was already covered in ways by the Honor Principle and the fact that decisions are made democratically.
The group also discussed making ethical considerations of investments part of the expectations of a pitch, and to edit the pitch template accordingly. Most members felt much safer with this idea.
At the conclusion of the meeting, the group decided to have a couple of the members form an ad-hoc committee lead by Davis to draft changes to the charter and the pitch template.
Investment Club was founded about two years ago, when Trustee George James ‘77 gave the club $50,000 for the purpose of giving Reedies an opportunity to learn how to invest. Investment club uses fund to invest up to $2,500 in any company in the Russell 1000 index (a restriction set out in the charter), in an attempt to have their portfolio perform better than the index.
The pitches are approved by a majority vote of the members of the club, and must also get final approval from Professor of Economics Kimberly Clausing.
The club has a Moodle page that is open to all students, and contains their charter, list of current holdings, resources on learning about investments, and even a humor section with a link to the blog brokershandsontheirfacesblog.tumblr.com.
During their recent meeting, Spanos pitched Tesla Motors, a recently founded electric car company headed by Elon Musk.