In the beginning, there was a guiding principle: Thou shalt not make money from industries that do harm.

From this sprang a small cadre of so-called ethical investors. Primarily well-heeled religious folk, ethical investors followed their creed by sidestepping investments in tobacco, alcohol, and gambling companies. In the 1960s and 1970s—during the Vietnam War—the movement expanded to add agents of war, such as manufacturers of guns, bombers, and nuclear weaponry, to the list of "shalt-nots." And they quietly invested, secure in the knowledge that even though they couldn't change the world, ethical investors would at least sleep knowing that their money was not being used to do harm.


A cry for help changed everything. In the early 1980s, bishops of the Anglican Church in South Africa appealed to their brethren in the American Episcopal Church to help them end apartheid. When a decade of quiet urging proved fruitless, the ethical investors got more boisterous and started enlisting powerful allies, including managers of multibillion-dollar pension funds and city and state treasurers.

When they flexed their collective muscle by divesting themselves of investments in companies doing business in South Africa, that country's economy went into a tailspin. Suddenly, South Africa's white minority government sat down to bargain with the black majority, which helped lead to a complete overhaul in the system of government. And it also ...

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