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Investing in social goods

Schumpeter perpetuated the myth that there is an inherent conflict for investors between doing well and doing good (January 21st). Asking whether it is shareholders or “the people” who matter most is a false dichotomy. Another view sees financial returns to shareholders deriving from broader contributions to society. In Canada consumers trust and support brands that are consistent with their broader values around society’s well-being, environmental responsibility and community contribution. Such behaviour encourages greater loyalty and lowers price sensitivity, both factors that affect the bottom line. There are also tangible benefits to a firm from engaging with employees and from lower staff turnover. We need investment models where the interests of society add to shareholder returns, not ones that consider them a cost. 

SAUL KLEIN
Dean
Gustavson School of Business
Victoria,...