Development of Ethical Investing in the United States

The leading development of the United States’ ethical investing is inseparable from the United States’ superior financial market environment, humanistic spiritual environment, and many other factors. Three aspects of the advantages will be discussed as the relatively mature financial market, the humanities and cultural factors and the world leadership.

Relatively Mature Financial Market The developed and mature financial markets of the United States provide the foundation and space for the generation and development of ethical investment. In terms of market size, market structure, market freedom, credit instrument innovation, and monetary policy transmission, it is more mature and perfect than other countries, so the US currency market has become the most developed currency market in the world. Specifically, the maturity of the US financial market is reflected in many aspects. We can clearly see that there are various practitioners of ethical investing in the United States (See Table3.2), to which was contributed a lot by its relatively mature financial market far more than other developing countries.

Table 3.2 Practitioners of Ethical Investing in the United States

Practitioners Characteristics

Individuals Who invest—as part of their savings or retirement plans—in mutual funds that specialize in seeking

companies with good labor and environmental practices.

Credit unions and community development banks

Have a specific mission of serving low- and middle-income communities

Hospitals and medical schools Refuse to invest in tobacco companies Foundations Support community development loan funds and

other high social impact investments in line with their missions

Religious institutions File shareholder resolutions to urge companies in their portfolios to meet strong ethical and

governance standards

Venture capitalists Identify and develop companies that produce environmental services, create jobs in low-income

communities or provide other societal benefits Responsible property funds Help develop or retrofit residential and

commercial buildings to high energy efficiency standards

Public pension plan officials Who have encouraged companies in which they invest to reduce their greenhouse gas emissions and to factor climate change into their strategic

planning

Source: https://www.ussif.org/sribasics, author

The maturity of the U.S capital market system is reflected in all aspects. There are five national stock exchange markets in the United States. No matter the size of the company,

with the support of investment banks, there are opportunities for listing financing. A large number of institutional and individual investors of different sizes are looking for different investment targets in different stock markets according to their respective requirements and purposes, providing the US stock market with the largest capital base in the world, thus making the US stock market very active financing and M&A activities are frequent. The United States has no currency control, the US dollar goes in and out of the United States, and the policy encourages foreign companies to participate in investment behavior and become the world's financial capital. Listed companies can issue new shares financing at any time.

There is no limit to time and frequency, usually determined by the board of directors and reported to the securities regulator. The stock and bond markets have mature bond ratings and stock rankings, as well as multiple stock price indices. All the advantages of all financial markets provide a fertile ground for the development of ethical investment.

Humanities and Cultural Factors

As the history of American ethical investing mentioned above, the humanities and cultural factors has contributed a lot to the development of U.S ethical investing. The United States is a country highly developed in the humanistic spirit, which includes the respect for human rights and freedoms, protection of the environment and animals, emphasis on ecological green, environmentally friendly, and also the intangible norms of moral quality.

These most basic values are reflected in capital investment, and they have become the investment method based on morality.

The first ethical funds were based on strongly-held religious or ethical convictions that investors did not want their money funding companies involved in gambling, armaments, tobacco sales or pornography. But rather than simply apply a negative screen, the latest generation of ethical funds have a more positive remit, actively seeking to invest in companies that do good, rather than just avoiding those who don't. Many also have an environmental slant, supporting companies involved in green technology, pollution control, water desalination, and the use of natural resources more efficiently. Ditchfield says these appeal to a far broader spectrum of investors, "who are well aware of the challenges we face".

Over time, the ethical investing in the United States has gradually improved, expanded, and well-developed. It can be said that American culture promotes and develops the ethical

investing in the United States.^[12]

Leadership in the World

The United States is the world's largest country, not only occupying an important position in the economy, but also having a world-leading position in politics and culture which laid a solid foundation for the sound development of U.S ethical investing. To some extent, countries all over the world are guided by the developed capitalism of the United States and develop their own national economy. Therefore, the development of ethical investment in the United States has also become a kind of propaganda and appeal, playing a leading and leading role in the world. And also, the United States not only plays a leading role in the global economic and political situation, but also plays a representative role in international common problems such as human survival and development, regardless of climate resources, ecological environment, animal protection, human rights issues, women and children issues, terrorist issues, religious issues and so on.

In terms of ethical investing, the United States itself did a good job. Specifically, the total US-domiciled assets under management using SRI strategies grew from $8.7 trillion at the start of 2016 to $12 trillion two years later, an increase of 38%. That's also 26%, or 1 in 4 dollars, of the $46.6 trillion In total assets under management. There’s a growing number of VC and private equity funds interested in these areas. Plus, assets invested with sustainable strategies are growing faster than the financial markets as a whole.

In 2019, U.S. stocks, as measured by the S&P 500, did even better, rising 13.6% for their best quarterly showing since 2009’s third quarter. (Sumit Roy, 2019). ETFMG Alternative Harvest ETF, which is the first pot-focused ETF to trade in the US The fund tracks an index of stocks across the globe that are engaged in the legal cultivation, production, marketing or distribution of cannabis products for either medical or non-medical purposes.

MJ also holds stocks Of companies that trade or produce tobacco or tobacco products, or fertilizers, plant foods, pesticides or growing equipment for cannabis or tobacco. In addition, the fund can hold pharmaceutical companies that produce, market or distribute drug products

12 SIMON Emma. Ethical Investment: Why it's not principles over performance. The Guardian [Online].

Oct,2013. Available on:https://www.theguardian.com/sustainable-business/ethical-investment-principles-perf ormance

that use cannabinoids. MJ can only At the time of launch, the fund did not include companies growing or distributing marijuana in the US due to its continuing prohibition at the federal level. The index provider uses publicly available sources To identify companies that derive more than half their revenue from cannabis-related activities.^[13]