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It has been nearly a month since BP PLC was dumped from one of the more influential ethical investment indexes, the FTSE4Good index. The move now looks baffling from a performance perspective, in addition to the ethical perspective: BP shares have been outperforming.

Of course, there was no mystery or even real surprise behind the announcement, made in September. The FTSE4Good index, as the name implies, taps companies that - in FTSE's words - "meet globally recognized corporate responsibility standards."

Evidently, spilling massive amounts of oil into the Gulf of Mexico isn't consistent with those standards. "The committee's decision to remove BP followed consideration of the company's response to the Gulf of Mexico oil spill, the environmental and social impact and its history of similar incidents," FTSE said at the time.

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I've never been a fan of socially responsible investing, as regular readers of this blog no doubt know. Investing is supposed to be about making money, not doing good. And the best way to make money is to keep your investing options open to as many different stocks as possible.

When it was announced that BP would be evicted from the FTSE4Good index, you could sense that the worst was behind the company: the dividend had been scrapped, the leaking well had been plugged and the share price had rebounded 40 per cent from its multi-year low in June.

Since then, BP shares have risen another 8.5 per cent in New York, beating the 6.5 per cent gain for the FTSE4Good index over the same period. Being labelled as unethical didn't hurt BP at all. Not yet, at least.

My other problem with ethical investing, though, is that I find it hard to see any agreement on what constitutes an ethical investment. After all, ethical is in the eye of the beholder. Tobacco, weapons and nuclear energy are the usual no-nos - even though some observers would point out that tobacco is perfectly legal, weapons are needed by police forces and the military, and nuclear energy is a cleaner alternative to coal.

After that, it's easy sport to pick away at individual companies for anything you want - the way they pay their workers, their impact on the environment, their obscene profits, etc.

Curiously, FTSE kicked out BP from its ethical investment index only well after the oil spill occurred, which seems backward. What this means is that companies that could cause tremendous environmental damage are welcome in an ethical index - until they do cause tremendous environmental damage. I'm not sure how this serves investors who want to feel good about their investments.

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