Responsible investing vs. investing in questionable assets

on Mar 31, 2023
  • What's considered questionable investment?
  • Sin or vice sector assets may offer huge investment opportunities.
  • ESG investing considered one of the top responsible investing targets.

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There has been a lot of talk about responsible investing versus what’s considered investment in questionable assets. For example, many funds do not invest in the so-called sin sector or vice funds, with many considering tobacco, alcohol, weapons, adult entertainment, nuclear power and gambling to be questionable investment targets.

On the other hand, some investors sniff precisely such opportunities, which, as noted, are avoided by many large funds.

Investment opportunities in the gambling industry

The gambling industry can offer many investment opportunities for those looking to diversify their portfolios. The investor can invest in casino operators, game manufacturers and other companies related to gambling.

In addition to games, casino operators have other revenue streams, such as food and beverage services, accommodation and entertainment. Casino operators often receive substantial revenue from slot machines, table games, poker rooms and sports betting.

A large part of the players nowadays also play games in online casinos, for which even companies listed on the stock exchange produce games. For example, NetBet offers thousands of different slots, table games and jackpot games. The casino cooperates with major game manufacturers to constantly offer players new interesting games. The future of companies that produce games for online casinos looks quite promising, even from the eyes of an investor.

In addition to “traditional” investments in gambling companies, investors can also consider investing in, for example, blockchain startups that are dedicated to developing new technologies for gaming platforms and cryptocurrency casinos. By investing in both traditional players and innovative ventures related to the gambling industry, investors can benefit from both long-established companies and emerging technologies that are poised for growth.

ESG Investing

Responsible investing is an approach that aims to create positive environmental, social and corporate governance impacts while generating long-term financial returns. In this case, we often talk about ESG investing as well. ESG stands for Environmental, Social and Governance.

ESG factors are incorporated into the investment process and decision-making to identify and manage risks or opportunities that may arise from changing ESG regulations or corporate behavior. It can mean, for example, avoiding investments in companies that engage in deforestation or child labor, or favoring investments in renewable energy projects. It is often avoided to invest in, for example, alcohol, tobacco and adult entertainment.

Investors who purposefully focus on responsible investing today also use advanced metrics, such as environmental, social and governance scores, when evaluating potential investment targets. This helps them identify potential risks related to ESG issues for each potential investment.

The sin sector can offer opportunities

Of course, it is each investor’s own decision whether to invest in vice funds, i.e. the so-called sin sector. Nuclear power, for instance, is also often included in the sin sector, which many people don’t think has anything bad to do with it. Since many large funds do not invest in the sin sector, interesting opportunities may open up for private investors.

Alcohol is also often found on the black list. However, according to many investors, there is nothing really bad about alcohol, as long as it is not served to minors. It is each adult’s own decision as to how much alcohol they ultimately drink, and investing in this sector should not increase the amount people drink.

Since many avoid investing in vices, some investors focus specifically on them. Many people may miss out on great opportunities, so for those who do not see a moral obstacle in this, there may be better opportunities compared to other stocks.

Investing in the environmental sector

Investing in the environmental sector can open up many opportunities for responsible investors. Investing in green technology companies offers investors access to new and innovative companies that can shape our future energy sources. Climate change has been talked about a lot in Finland in recent years. Investing in companies that focus on renewable energy production or energy efficiency, such as wind and solar energy, is a great way to get involved in this fast-growing industry.

Investors may also have opportunities to participate in the creation of a greener economy by investing in funds that support environmentally friendly targets, such as clean energy production, adaptation to climate change and environmental protection measures. In Finland, even more attention will be paid to these in the future.


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