Investment Firms Targeting Gun Companies

   06.18.18

Investment Firms Targeting Gun Companies

There was once a time when investment firms wanted one thing, and that was profits. The mindset of the old guard was that everything must be sacrificed to make money. It did not matter if it meant dumping chemicals in the ground or denying any amount of social responsibility. Profits were king. As long as the comapny was doing well, investors turned a blind eye.

As times change, so does ideology. Some investment firms are putting the squeeze on companies to bring about various changes such as improved wages, climate change, and other problems facing society. The new buzz words are “Responsible Investing.” It just so happens that gun companies are the new targets for these “Responsible Investing” firms.

How are investment firms going to put the squeeze on gun companies? By cutting off the money, or calling on stockholders to vote on certain issues.

From The New York Times – A Champion of Responsible Investing Takes On the Gun Industry.

Mr. Streur, 58, has long been a leader in what’s called environmental, social and governance investing, starting in a boutique money management firm in 1991.  But lately, his profile on Wall Street and beyond has been raised by the gun debate.

After recent mass shootings, questions have been asked about what role investors might play in forcing companies to ask themselves whether they are complicit in gun violence, and whether businesses, banks or firearm retailers should set rules limiting gun sales or lending to gun manufacturers.

Social Responsibility, Or Attack On Freedom?

Before we launch into the typical barrage of, “It’s not the gun”, let’s take a moment and ask ourselves this question: Do we have a responsibility to bring about social change? Surely, most of the people reading this article have been part of a boycott. How many people said they would never buy a Yeti cooler, or shop at Dick’s Sporting Goods?

Is there a difference in a financial firm manager who wants to bring about change, and a gun owner who wants to bring about their own change?

Yes, there is a difference, and it is a big difference. Investment managers are attempting to subvert the free market.

Free Market

The consumer decides what products fly off the shelf, or sit and collect dust in a free market. When a company loses money on products that are not selling, they are supposed to give the customer what they want.

Investment firms are attempting to bypass the consumer and force companies to bring about certain change. Rather than the market bending to the will of the consumer, the market is being shaped by investment firms and the leaders of those firms.

In the end, this will be a lose-lose situation. Consumers are left with products they do not want, and companies try to sell products the consumer does not want. At the very end of the line the investment firms are not going to be happy, because the companies are probably going to lose a lot of business.

Read More