If asked to name a socially responsible public company off the cuff, many people would very likely answer Starbucks (Nasdaq: SBUX). That's why I found it fairly jarring to hear that Pax World Funds, a socially and environmentally responsible mutual fund, issued a press announcement yesterday proclaiming it had "reluctantly" divested itself of all shares of Starbucks.
Why?
Alcohol.
You might recall a recent piece here at the Fool on Starbucks' new coffee-flavored liqueur, in partnership with Fortune Brands' (NYSE: FO) Jim Beam whiskey. (There were rumblings about this liqueur as far back as last April.)
The first knee-jerk reaction of many people is probably, "Huh?" Alcohol is one of the most pervasive social lubricants of modern society -- not to mention the stuff of celebration and solace and hooray happy hours and lazy Sunday afternoons watching football. What's the big deal, right?
As a former drinker for about 10 years, I have often thought that compared with other social ills like smoking, alcohol has been given short shrift in terms of negative press. Although many folks enjoy a drink or two now and again with no ill effects, many people fail to remember or understand that alcoholism (as opposed to alcohol) not only results in deaths from drunken driving and other accidents, but it can also add a chaos and a darkness to life that can destroy careers and relationships.
Regardless, though, in the long run, I've got to go with my usual stance: Such decisions should be left to the individual, and what is "socially responsible" or not is a purely personal opinion. (In fact, if you read Lawrence Meyers' highly interesting The Myth of Socially Responsible Investing, he points out the term that most of us would use for this very idea: "moral relativism.")
If you admire Starbucks' environmental stance, its commitment to fair trade, and its solid treatment of its employees, then, by all means, buy into the company. To my way of thinking, those attributes certainly count as plenty socially responsible, and a little bit of liquor, which isn't even being sold in an "inappropriate" venue, but rather in bars and restaurants, isn't going to change that.
Apparently, Pax World Funds' mission is to buy stocks that are not only socially responsible but that also eschew making any money from tobacco, alcohol, or gambling. And that's fine for Pax World, and for those who are looking for a fund that upholds such attributes.
The upshot is, yesterday's news may have insinuated some degree of "social irresponsibility" on Starbucks' part. The decision may reinforce Pax World's mission, but for most of us, that's likely far too simplistic a view. A stock's "social responsibility" -- or lack thereof -- is a purely personal matter.
If you're here because you're wondering about socially responsible (or downright sinful) investing angles, check out the following related Foolish content:
Pull up a seat on our Starbucks discussion board, where a discussion of this issue is currently under way in a thread called "Chickens."
Alyce Lomax does not own shares of any of the companies mentioned. Despite her sobriety, some may argue that she's one heck of a scary designated driver.
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