“It’s all very subjective; sin used to be defined by religion, but today politics seems to be more relevant [as a means to define sin],” says Professor Theo Vermaelen, professor of finance at Insead and the UBS Chair in Investment Banking.
While the definition of a sin stock remains unchanged, the range of companies categorised as such has expanded due to evolving societal views on what constitutes unethical or immoral business practices.
As socially responsible investing has gained popularity in the last decade, with a focus on environmental and social welfare, the term “sin stock” has expanded to include stocks that might have been considered more “grey” — such as fossil fuel companies and military defence contractors.
