Modern commodities: The ethics

ETHICAL

Neville White, socially responsible investment analyst at Ecclesiastical Investment Management, says the problem with commodity trading is that it is obscure, with poor corporate governance and business practices.

Soft commodities such as cocoa, coffee, sugar and cotton, are the building blocks of the global economy. Yet despite their significance, commodity trading is opaque and elusive, with complex and extensive supply chains controlled by a few giant global companies. Many of these companies are unlisted and not subject to normal corporate transparency requirements. The light regulatory oversight increases the risk for trading to become highly speculative and potentially manipulative. Ethical issues are integral in this process, with an increasing number of companies putting responsibility ...