It's been like watching a crocodile propose vegetarianism.
Suddenly, this show is over. The crocodile's tears were possible because, to him, ethical investment was largely irrelevant. In the great casino that is the market, it was a side game played out on one of the small tables.
But political forces are now moving the game to the centre tables. In the summer, the Government introduced a new requirement for pension funds. In future, every scheme will be required to "make a statement on social, ethical and environmental investment". UK pension funds are worth the best part of pounds 1,000bn - the biggest component of the UK stock market. Suddenly, the stakes in the ethical game have become frighteningly high.
Pension funds have seized on the idea with enthusiasm. Not least the vast funds controlled by local authorities. This autumn's local government conference was dominated by the new buzzword SRI (socially responsible investment). One after the other, politicians took the stand to argue in its favour. Unfortunately, the investment managers in the audience treated this with a mixture of bewilderment and downright hostility.
Why should investors be frightened? Of course it would be wrong if the individual beliefs or prejudices of pension trustees led to underperformance. If ethical investment meant lower returns, and therefore lower pensions, then scheme members would have every right to be up in arms. But I do not believe this has to be the case.
Shareholder power is a crucial part of how any capitalist society works. It is the ultimate check on the behaviour of companies. Pension funds are the most powerful part of this equation. It is right for the Government to get involved. There are few corners left in our society where private companies do not reach. In the States, the extremely litigious nature of society frightens companies into respecting the issue. The very large awards in the courts will be watched by corporate power brokers as matters of commercial interest. The UK is different. We have no such legal club with which to batter misbehaviour.
We used to hear a lot about the stakeholder society before the concept was kidnapped as a soundbite for the new pensions vehicle. In its original use it referred to the German concept. In Germany, a business has a 360- degree vision. It is not simply owned by the shareholders but equally by its workforce and customers. It considers the impact on the community in which it operates. Many investors shy away from this kind of socially responsible investment, believing it to be costly dreaming. I passionately believe this to be false.
Is it really so radical to suggest that a company which looks after its workforce and which thinks about its customers will perform better?
It makes financial sense to talk about equal opportunities. We are living in a multi-cultural, multi-ethnic society, and if there's anyone in a senior position who doesn't realise this then it's their loss. It is also their business's loss. The courts will gradually clear up discrimination problems in the workplace, while the market will reward companies that understand their customers.
Trashing the environment for a quick profit might give a company short- term gains but it also creates very serious long-term liabilities. The cost of the environmental clean-up in the United States is now running into billions, and there are an awful lot of shareholders picking up the bill. Being green makes you financially clean.
In this area a "Third Way" can have real meaning. We have a great opportunity in the UK to combine all that is good about the thrusting dynamics of American capitalism with the more caring social model we see in continental Europe. It is time to rewrite the Eighties creed that "greed is good for you". Ethical investing will make you rich.
n Chris Walker is director of Hill Samuel. Contact: christopher. email@example.com