Are "Sin Stocks" Actually Less Ethical? A Data-Driven Analysis
ESG funds treat "sin stocks" as untouchable. Tobacco, alcohol, gambling -- excluded by default, no further analysis required. The assumption is that harmful products equal harmful companies.
We tested that assumption with data.
Mashinii scored 11 sin stocks and 8 mainstream blue chips across 11 ethical dimensions using court filings, regulatory penalties, investigative journalism, and NGO reports. No self-reported sustainability disclosures. No corporate PR. Just documented conduct.
The result: sin stocks score worse on average, but only by 5.1 points. And on 4 of 11 dimensions, they outperform the companies that ESG funds consider responsible.
The Numbers at a Glance
| Metric | Sin Stocks | Mainstream "Ethical" Stocks |
|---|---|---|
| Companies scored | 11 | 8 |
| Average score | -9.8 | -4.7 |
| Companies scoring positive | 1 of 11 (9%) | 4 of 8 (50%) |
| Companies scoring below -15 | 3 of 11 (27%) | 4 of 8 (50%) |
| Dimensions where group scores higher | 4 of 11 | 7 of 11 |
A 5.1-point gap on a scale of -100 to +100. That is the total measured difference between the industries ESG funds shun and the industries they embrace.
Half the "ethical" comparison group -- Johnson & Johnson, Procter & Gamble, Coca-Cola, and PepsiCo -- scored worse than the sin stock group average of -9.8. All four sit in nearly every ESG fund in the world.
The Sin Stock Sample
| Company | Ticker | Average Score | Sector |
|---|---|---|---|
| MGM Resorts | MGM | +0.5 | Gambling |
| Constellation Brands | STZ | -3.6 | Alcohol |
| Molson Coors | TAP | -3.6 | Alcohol |
| Wynn Resorts | WYNN | -5.0 | Gambling |
| Brown-Forman | BF-B | -7.3 | Alcohol |
| DraftKings | DKNG | -7.3 | Gambling |
| Diageo | DEO | -8.2 | Alcohol |
| Las Vegas Sands | LVS | -8.2 | Gambling |
| Altria Group | MO | -19.1 | Tobacco |
| Anheuser-Busch InBev | ABI | -18.2 | Alcohol |
| Philip Morris International | PM | -27.3 | Tobacco |
The "Ethical" Comparison Group
| Company | Ticker | Average Score |
|---|---|---|
| Salesforce | CRM | +11.8 |
| Apple | AAPL | +9.5 |
| Microsoft | MSFT | +5.5 |
| Alphabet/Google | GOOGL | +2.3 |
| Johnson & Johnson | JNJ | -14.1 |
| PepsiCo | PEP | -15.0 |
| Coca-Cola | KO | -18.2 |
| Procter & Gamble | PG | -19.1 |
These eight companies are among the most common ESG fund holdings globally. Their average score is still negative. The bottom four perform substantially worse than the top six sin stocks.
Four Dimensions Where Sin Stocks Win
The conventional narrative assumes sin stocks lose everywhere. They do not.
No War, No Weapons: Sin Stocks -0.9 vs Mainstream -26.2
The largest gap in the entire comparison. It favours sin stocks by 25.3 points.
Tobacco companies do not build missiles. Gambling operators do not hold defence contracts. In the mainstream group, Microsoft scored -60 on No War, No Weapons, reflecting defence contract relationships documented in public procurement records. Procter & Gamble scored -50. Google scored -30. Apple scored -20.
Every sin stock in the sample scored between 0 and -10 on this dimension. MGM Resorts and Wynn Resorts both scored 0.
When an ESG fund excludes a tobacco company but includes a technology firm with billions in documented defence contracts, the exclusion is not a comprehensive ethical assessment. It is a category label doing the work of analysis.
Fair Pay & Worker Respect: Sin Stocks -15.5 vs Mainstream -26.2
Counterintuitive. The hospitality and gaming companies -- MGM Resorts (+20), Wynn Resorts (+20) -- scored positively, reflecting unionised workforce practices and worker compensation structures in public records.
In the mainstream group, Apple scored -30 on Fair Pay & Worker Respect, reflecting supply chain labour findings in independent assessments. Google scored -30. The companies included for their perceived responsibility carry a worse documented record on worker treatment than the companies excluded for their products.
Safe & Smart Tech: Sin Stocks -5.5 vs Mainstream -10.0
This gap exists because the mainstream group carries significant data privacy exposure. Google scored -30 on Safe & Smart Tech. Microsoft scored -30. Johnson & Johnson and PepsiCo both scored -30.
Most sin stocks scored 0 -- their industries have lower data privacy risk profiles. Molson Coors and Las Vegas Sands both scored +10.
Kind to Animals: Sin Stocks 0.0 vs Mainstream -1.2
A narrow gap. Several alcohol companies scored positively: Brown-Forman at +20 on Kind to Animals, Molson Coors at +10, Wynn Resorts at +10.
Procter & Gamble scored -30, reflecting documented animal testing practices in public reports. Johnson & Johnson scored -20. Those negatives drag the mainstream average below the sin stock average.
Seven Dimensions Where Mainstream Stocks Win
The mainstream group leads on the remaining seven dimensions. The three largest gaps tell the clearest story.
Better Health for All: Mainstream +5.0 vs Sin Stocks -26.4. The widest gap at 31.4 points. Altria scored -70. Philip Morris scored -60. The health consequences of tobacco and alcohol are documented extensively in court filings and epidemiological research. This is the core of the sin stock thesis, and the data confirms it.
Planet-Friendly Business: Mainstream +3.8 vs Sin Stocks -14.5. Apple (+40), Google (+40), and Salesforce (+40) scored strongly on Planet-Friendly Business, reflecting documented renewable energy commitments. The exception: MGM Resorts scored +30 on this dimension, better than four of the eight mainstream companies.
Zero Waste & Sustainable Products: Mainstream +8.8 vs Sin Stocks -6.4. A 15.2-point gap. But Constellation Brands and Molson Coors both scored +30 on Zero Waste & Sustainable Products, and Brown-Forman scored +20 -- documented waste reduction programmes in the alcohol industry that category exclusion renders invisible.
The Full Dimension Comparison
| Dimension | Sin Stocks Avg | Mainstream Avg | Gap | Higher Group |
|---|---|---|---|---|
| No War, No Weapons | -0.9 | -26.2 | +25.3 | Sin stocks |
| Fair Pay & Worker Respect | -15.5 | -26.2 | +10.7 | Sin stocks |
| Safe & Smart Tech | -5.5 | -10.0 | +4.5 | Sin stocks |
| Kind to Animals | 0.0 | -1.2 | +1.2 | Sin stocks |
| Fair Trade & Ethical Sourcing | -18.2 | -13.8 | -4.4 | Mainstream |
| Honest & Fair Business | -17.3 | -10.0 | -7.3 | Mainstream |
| Fair Money & Economic Opportunity | -0.9 | +7.5 | -8.4 | Mainstream |
| Respect for Cultures & Communities | -1.8 | +11.2 | -13.0 | Mainstream |
| Zero Waste & Sustainable Products | -6.4 | +8.8 | -15.2 | Mainstream |
| Planet-Friendly Business | -14.5 | +3.8 | -18.3 | Mainstream |
| Better Health for All | -26.4 | +5.0 | -31.4 | Mainstream |
Three Companies That Break the Pattern
Category labels promise simplicity. These cases show why simplicity fails.
MGM Resorts: A Casino Operator That Outscores Coca-Cola
MGM Resorts is the only sin stock in the sample with a positive average (+0.5). Its profile:
| Dimension | Score |
|---|---|
| Planet-Friendly Business | +30 |
| Respect for Cultures & Communities | +25 |
| Fair Pay & Worker Respect | +20 |
| Fair Money & Economic Opportunity | +10 |
| Honest & Fair Business | +10 |
It scored +30 on environmental performance -- higher than Microsoft, higher than every consumer staples company in the mainstream group. It scored +25 on community respect and +20 on worker treatment.
A company that operates casinos scored higher on Mashinii's methodology than Coca-Cola, PepsiCo, Johnson & Johnson, and Procter & Gamble. All four of those companies appear in major ESG funds. MGM does not.
View MGM Resorts' full score breakdown -->
Procter & Gamble: An ESG Favourite at -19.1
Procter & Gamble scored -19.1. It appears in nearly every ESG fund on the market. It scored lower than 9 of the 11 sin stocks in our sample.
Its -50 on No War, No Weapons represents a larger documented military supply chain footprint than Philip Morris (-10), Altria (0), or any gambling company in our sample. Its -30 on Kind to Animals is the lowest animal welfare score in either group. On worker respect, it trailed MGM Resorts by 50 points.
View Procter & Gamble's full score breakdown -->
Coca-Cola: Scoring Identically to Anheuser-Busch InBev
Coca-Cola scored -18.2. Anheuser-Busch InBev also scored -18.2. A soft drinks company and a beer company, matched point for point on documented corporate conduct.
Coca-Cola's -40 on Fair Pay & Worker Respect is worse than Philip Morris, worse than Altria, and 60 points worse than MGM Resorts. Its -30 on Better Health for All reflects documented public health concerns related to sugar consumption and marketing practices in independent reports.
One of these companies is in ESG funds. The other is not. The data does not explain why.
View Coca-Cola's full score breakdown -->
What This Means for Your Portfolio
Exclusion-based investing screens out entire industries. What remains is presented as responsible. Our data identifies two problems with that approach.
It misses documented risks in "acceptable" industries. Procter & Gamble's -19.1 and Coca-Cola's -18.2 are worse than 8 of the 11 sin stocks we scored. Johnson & Johnson's -14.1 is worse than 6 of them. These companies are in ESG funds not because of what they do, but because of what they sell.
It ignores documented positive conduct in excluded industries. MGM Resorts scored +30 on environmental performance. Brown-Forman scored +20 on animal welfare. Molson Coors scored +30 on sustainable products. Category exclusion makes all of this invisible.
The sin stock label is a shortcut. When a shortcut produces results this inconsistent with documented conduct, it is worth questioning whether the shortcut serves investors or simply serves the funds that market it.
Where Sin Stocks Earn Their Label
Health is the exception. On Better Health for All, sin stocks averaged -26.4. Altria's -70 and Philip Morris's -60 rank among the lowest scores in Mashinii's entire database on any dimension. The documented public health consequences of tobacco and alcohol consumption are extensive, well-evidenced, and serious.
That cost is real. But it is one dimension out of eleven. An investor who excludes Philip Morris for health reasons but holds Microsoft (-60 on weapons exposure) or Procter & Gamble (-50 on weapons, -30 on animal welfare) has not eliminated ethical risk. They have substituted one form for another -- and may not realise it.
How These Scores Are Generated
Every score in this article comes from independently verifiable sources: court filings, regulatory penalty records, investigative journalism, and NGO reports. Companies cannot influence their scores through self-reporting or sustainability disclosures. Scores range from -100 to +100 across 11 independent dimensions.
Mashinii's methodology does not label companies as ethical or unethical. It measures documented conduct and presents the data.
See exactly how the scoring works -->
Find Out Where Your Holdings Stand
The gap between what ESG labels promise and what the data shows is wider than most investors expect. Whether you hold sin stocks, blue chips, or both, every company in your portfolio carries a score across all 11 dimensions.