Wharton Exterior View (Click on image for source)

A week ago my classmate Peter Byrne in his blog  talked about a recent decision of University of Pennsylvania’s Warlton Business School to implement a non-disclosure policy which would mean that the school would not disclose students’ grades to employers.

I understand Mr. Byrne’s view which is that the students will generally study less and rely mainly on the elite reputation of the school to get good jobs.

However I am not totally against this policy. High marks do not necessarily mean good communication skills, proficient management skills and leadership abilities (especially in business schools). The internships, job placements, awards, volunteering, entrepreneurial and other extracurricular endeavors mean as significant if not a more important role as do marks. Keeping that in mind it would be an excellent idea for universities to conduct several graduation interviews to build the students profiles.

Inside Wharton School (Click on image for source)

Click on image for source

It is apparent that social responsibility, environmental sustainability and management plays a role in investing. As shown in a video series on otpp.com responsible investing is more complicated than it seems.

Take for example the bio-fuel industry. It seemed like a great idea to make an environmentally responsible investment to reduce the environmental harm caused by extraction of oil. However the high increase in demand for wheat driven by increased production of ethanol, drove food prices up. What was an environmentally responsible investment quickly turned into a socially irresponsible one.

What then should we focus on to make the most responsible investments? The nature of the industry plays an important role in this assessment. The tobacco industry is bad because Tobacco kills people. It is also important to take account the companies mission or value set, and the fate of the company’s workers in other parts of the world.

In our highly pluralistic world the level responsibility and transparency has a significant impact on how well the stock of a company is doing in the market. Hence responsible investing seems to reduce risk.

As Milton Friedman would say, the objective of any investment is to make more money. Maybe the way to make more money is to act in a socially and environmentally responsible way.

To read more about this you should also check out this business ethics blog post by Chris McDonald.

Responsible Investing