Now This Is a Worthwhile Investment Idea

This article is part of our Real-Money Stock Picks series.

I'm always on the lookout for socially responsible ways to invest the cash of the real-money stock portfolio I'm managing for Fool.com. Over the weekend, several of my Foolish colleagues offered up an idea that would fit the bill. Even better, the idea they put forth is not only positive, but downright revolutionary. It made me happier than ever to be a Fool.

Shortly after the Olympic opening ceremony, Isaac Pino, Charlie Kannel, and Tom Gardner outlined in detail Dow Chemical's (NYSE: DOW  ) ties to the 1984 Bhopal tragedy in India, and described how the negative after-effects of the incident have continued.

Dow Chemical, which bought original polluter Union Carbide, as the article outlines, has offended those who recall history by its sponsorship of the 2012 Olympics. It's even more galling because London has sought to create the "first truly sustainable Olympic games."

An anti-greenwashing group pointed out that three major sponsors at these Olympic games -- Dow Chemical, Rio Tinto, and BP (NYSE: BP  ) -- have one thing in common: legacies of environmentally irresponsible corporate behavior.

Monsanto's (NYSE: MON  ) no stranger to environmental controversy, nor is Dow Chemical. Corporate ancestors related to Monsanto and Dow Chemical both were major manufacturers of Agent Orange. That's right, if you trace corporate family trees back far enough, you'll find both of these companies among the ones linked to the controversial defoliant.

Since the Vietnam War, millions in settlements have been paid out in lawsuits related to the adverse health effects due to the use and production of Agent Orange. Incidentally, Dow Chemical's website deflects responsibility by stating that the American government compelled it to produce Agent Orange for warfare purposes, but many are still seeking restitution.

New controversy's cropping up around Dow Chemical, Monsanto, and Agent Orange, too, as some critics fear that unhealthy genetically modified "Agent Orange corn" and other crops are coming to fields near you -- and some hapless farmers who could suffer from herbicide drift if they choose not to plant those crops. These controversial crops would be immune to herbicides in the Agent Orange family as Monsanto's weed-killing Roundup loses efficacy. Therefore, there could be a huge upswing in the use of herbicides related to Agent Orange, which many believe cause negative health effects. Will someone think of the children of the corn?

Back to Bhopal
Agent Orange has more common name recognition than Bhopal, but many of the themes are similar: health effects, poisoned environments, and corporate gymnastics to avoid blame or the assumption of financial liabilities while humans suffered.

Isaac Pino, Charlie Kannel, and Tom Gardner devised an idea truly worth buying into when it comes to helping the people of Bhopal. They suggested that Dow Chemical remedy its own poisoned reputation related to the incident by making a new stock offering, the proceeds of which would be used to create a fund to help remediate the area and provide health care for those who are still suffering adverse health effects.

As their article pointed out, shifting blame and pointing fingers helps controversies like this one drag on unresolved for decades. If anyone needs a refresher course on corporate blame games in the face of adverse situations, just think about the relatively recent Deepwater Horizon disaster and subsequent Gulf oil spill, and how BP, Halliburton (NYSE: HAL  ) , and Transocean (NYSE: RIG  ) spent a shameful period during the crisis blaming one another for the incident more than actually figuring out what to do.

Anyone who tracks such corporate controversies would also notice frequent misdirection in the form of entities connected to such environmental disasters spun off like problem children, disowned and unacknowledged.

Such behavior has been accepted as business as usual for far too long. After all, to many, this sounds like the way to boost profit, in the short term, anyway. This is how too many of our corporations and market participants completely lose the point of how a healthy global marketplace should work.

If Dow Chemical were to issue stock solely to raise capital to help alleviate the ongoing tragedy in Bhopal, I'd be willing to purchase a stake for my real-money portfolio to kick in some capital and show solidarity with the gesture. Responsibility includes trying to make the world a better place. Someone has to step up or everyone falls down.

Our marketplace should thrive because our corporations show the leadership needed to boost economic well-being for all, thereby showing the power of capitalism to improve life on this planet, not cripple it. Our marketplace should dedicate itself to solving more problems than creating them. And it should recognize that shifting blame and arguing solves absolutely nothing.

And of course, if Dow Chemical were to embark on this initiative, it would go a long way to improve long-term value at the company. Moving forward isn't about forgetting, it's about addressing. And creating long-term value is increasingly about much more than the near-term financial bottom line; it's about creating sustainable value in the world at large.

Alyce Lomax does not own shares of any of the companies mentioned. The Motley Fool owns shares of Transocean. Motley Fool newsletter services have recommended buying shares of Halliburton. Motley Fool newsletter services have recommended creating a modified stock repair against synthetic long position in Monsanto. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (12) | Recommend This Article (15)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 01, 2012, at 5:36 PM, wolfhounds wrote:

    DOW et al, Paid out $180B, that's Billions, not millions to settle the Agent Orange lawsuit. The effects are still affecting thousands of Vietnam vets and their children. Now I'm no lawyer, but DOW's lawyers must have thought they got a good deal.

    Chemical companies are like banks. The lives they ruin are a blip in the bottom line.

  • Report this Comment On August 01, 2012, at 6:22 PM, xetn wrote:

    So Alyce, when you invest money in the "real money stock portfolio", do you do that in the hope of maximizing your return or are you just giving it away? Even if this hair-brained idea were ever to see the light of day, you would be better off just going to Bhopal and handing out cash to the citizens. You might actually get a psychic return on your "investment" but a real return would be just as unlikely as the stock purchase.

    The only "good" thing about this idea is it is not a government mandated one.

  • Report this Comment On August 01, 2012, at 6:34 PM, crazygood wrote:

    Are you kidding? This doesn't even make sense. This is not a "Real-Money Stock Pick."

    This is not even real. ???

    I agree, by the way, with all the environmental concerns, but you are not offering anybody a real alternative here.

  • Report this Comment On August 01, 2012, at 6:46 PM, SJLATTY wrote:

    This whole case was litigated in the Courts of India.

    The award has been paid.

    If you have a complaint, take it to the government of India.

    BP has paid billions for the mess in the gulf...the evidence is that no amount of $ paid will satisfy people like you. Dow would do no better.

    This is not investment advice, just social junk.

  • Report this Comment On August 01, 2012, at 6:53 PM, 2motley4words wrote:

    I couldn't agree more, Alyce. Whether it's expressed in HFT or some other type of short-term thinking, the narrow-minded obsession with immediate personal reward regardless of consequences too often proves toxic to someone somewhere. Anyone whose vision extends beyond next Tuesday should realize that ultimately the most-valuable long-term investment is that which enhances not only one's own existence but also that of one's once and future family (cf. "family of man").

  • Report this Comment On August 01, 2012, at 7:05 PM, 2motley4words wrote:

    Oops---my earlier comment was a bit imprecise: to my statement that "I couldn't agree more" I should've appended "with your social/environmental perspective"; like some other commentators, I too have some questions about how/how well your proposed investment idea might work.

  • Report this Comment On August 02, 2012, at 2:43 AM, ca9s wrote:

    Double high fives for a daring argument, one that seems to snap certain minds shut with an audible click. Keep up the thought-provoking work.

  • Report this Comment On August 02, 2012, at 3:58 AM, SuntanIronMan wrote:

    Far be it for me to tell other people what to do with their money, but:

    Wouldn't it be FAR more beneficial to just donate the money you'd theoretically invest in a Dow secondary offering to a charity that actually helps the victims? A worthy charity. One that could be trusted to give the money to the right people.

    So instead of waiting for a secondary offering to help the victims... a secondary offering from a company that you'd normally would never invest in as a socially responsible investor... a secondary offering that will likely never happen... why not just skip all of that and give the money to a charity?

    Or invest the money in a company you actually like as a socially responsible investor and donate that money of that to help the victims.

  • Report this Comment On August 02, 2012, at 4:02 AM, SuntanIronMan wrote:

    Or invest the money in a company you actually like as a socially responsible investor and donate that money of that to help the victims.

    (Donating the profits you'd potentially make from that investment.)

  • Report this Comment On August 03, 2012, at 11:11 AM, miraclejack wrote:

    I cannot believe that I just wasted my time reading an article so blatantly "Greenpeace" in nature.

    Your "job" as an investment advisor is to bring to light investment oportunities, NOT for the "better good of our planet", BUT for the "better good of our pocketbooks" !!

    and ... btw ... Greenpeace funding is ONLY from individuals -- i.e THOSE INDIVIDUALS WHO HAVE MADE MONEY INVESTING IN THE VERY COMPANIES YOU ARE CONDEMNING !!!

  • Report this Comment On August 04, 2012, at 4:15 AM, 2motley4words wrote:

    Miraclejack, although the irredeemable (or, in light of the topic at hand, should that be "irremediable"?) dichotomy that you've posited seems to work for you, would you allow that, for some Fools---i.e., those who believe in ultra-long-term investment---what is "better for our planet" is ultimately also what is "better for our pocketbooks"?

  • Report this Comment On August 16, 2012, at 8:29 PM, thidmark wrote:

    The time to invest in Dow was back when it was trading for 6 bucks in 2009. There's little upside left now, and certainly not if it follows this ridiculous TMF idea.

Add your comment.

DocumentId: 1967363, ~/Articles/ArticleHandler.aspx, 4/19/2014 8:52:39 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement