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  • Christian Armbruester

Nice versus Vice, Revisited

Given the choice, I think all of us would prefer to do good for the world. As such, from an investment standpoint, it does not seem entirely implausible that we should also put our money into companies that do not harm the environment, destroy our health, or promote ever more efficient ways of killing ourselves.

This is why ESG investing has become so popular and there are approximately $2.5 trillion sitting in funds that score highly in environmental, social, and governance criteria. However, the ratings are hugely flawed, and a company can utterly pollute our rivers, yet have good corporate structures which would make it eligible for ESG investing.

We therefore wanted to create a narrower definition of what we believe constitutes a good versus bad company. Enter, the “Nice” index which includes companies that focus on renewable energy, healthcare innovation, recycling, education, and sustainable food. The “Vice” index on the other hand, includes companies that deal in alcohol, fossil fuels, gambling, firearms, and tobacco.

Who won? It wasn’t even close and the first time we did this study in 2018, Vice won easily, outperforming by more than 77% in the preceding three years. More recently, Vice has not made any gains, which should provide some comfort for the good guys. Unfortunately, Nice lost 29% over the same period and continues to finish last.


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