Smart Buying

Should Ethics Determine Who You Do Business With?

Consumers seeking to do business only with ethical companies should ask these questions.

Question: I have a friend who refuses to patronize prominent businesses after they are discovered to have acted unethically. What do you think about this?

JAMES GLASSMAN: Why Socially Responsible Investing Is Not for Me

Answer: I’m fine with it—as long as your friend recognizes that making these decisions in a consistent, comprehensive way could end up being a full-time job. (The same goes for ethical investing, but so-called socially conscious mutual funds try to make this easier.)

I can understand consumers wanting to punish Wells Fargo and Volkswagen for the deceit practiced by some of their employees and executives, or shunning aggressive Silicon Valley firms (such as Uber) for their harsh corporate cultures. But here are some questions that consumers need to ask themselves:

- Are your choices simply reactions to negative revelations? Or are you also going to find out more about the regular business practices of all the major companies you patronize—their employee relations, environmental records, compensation levels, social stances, offshoring of U.S. jobs or whatever you care about most?

- If you avoid buying the products of a closely held company because you don’t agree with the politics of the company’s owner, are you taking the trouble to learn more about the politics and social attitudes of other business owners whose firms you patronize?

- Are you willing to pass up products that are deemed to be the best in their class—of high quality and well priced—because of something you don’t like about the maker?

- If you’re a passionate bargain hunter, are you aware that the makers and sellers of cheap products and services might be firms that squeeze their employees and vendors?

- In addition to boycotting companies you don’t like, are you tilting your patronage toward firms that have hard-earned reputations for business ethics (say, Costco, Lyft and Whole Foods)?

- Are you taking the time and trouble to tell the now-shunned company why you are no longer a patron?

SLIDE SHOW: The 10 Least Shareholder-Friendly Stocks

- Is your blacklisting forever, or can a company’s response to its crisis—restitution, firing the CEO—get it back in your good graces?

A lot of thorny issues to consider here.

Have a money-and-ethics question you'd like answered in this column? Write to editor in chief Knight Kiplinger at ethics@kiplinger.com.

Most Popular

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer
Coronavirus and Your Money

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer

The IRS has an online tool that lets you track the status of your stimulus checks.
February 19, 2021
Want More Tax-Free Retirement Income? One Man’s Whole Life Decision
life insurance

Want More Tax-Free Retirement Income? One Man’s Whole Life Decision

Whole life insurance might not be something that’s on your retirement planning radar, but for this client, here’s how it served his need to control ta…
February 23, 2021
The Current Plan for $1,400 Checks
Coronavirus and Your Money

The Current Plan for $1,400 Checks

Here's what you need to know about the stimulus check plan currently being considered in Congress for President Biden's COVID-relief package.
February 18, 2021

Recommended

What to Do When One Spouse Spends Too Much in Retirement
spending

What to Do When One Spouse Spends Too Much in Retirement

If one partner takes a less conservative approach to money, it can wreak havoc on a marriage. But the problem can be addressed by agreeing on bigger f…
February 10, 2021
A Golf Course Community’s Big Variable for Retirees
Smart Buying

A Golf Course Community’s Big Variable for Retirees

Golf club memberships can often be a separate, and hefty, annual fee at golf communities. Here's some guidance before you tee up your retirement move …
December 14, 2020
Don’t Buy This: Top 20 List of Things That Aren't Worth the Money
spending

Don’t Buy This: Top 20 List of Things That Aren't Worth the Money

Buyer’s remorse is real, and if you purchase any of these 20 items, chances are you’ll get to experience it firsthand.
December 9, 2020
Retirees, Get Ready for Virtual Video Visits for the Holidays
Smart Buying

Retirees, Get Ready for Virtual Video Visits for the Holidays

Tap into virtual video software, age-friendly gadgets, video apps and accessories to make seasonal gatherings safe.
December 4, 2020