Andrew Thompsett, Compliance Officer
Putting principle into practice
Public concerns about social, environmental and ethical issues are becoming widespread. The media is increasing awareness and fuelling debate about a whole range of issues making us question our principles and values. We are witnessing changes: the increase availability of organic and fair trade products, and the drive towards waste recycling to name but two.
Ethical investments and environmental concerns are issues moving up the public awareness agenda. Child labour and human rights in emerging economies and equal opportunities in first world economies are often raised in the press. Environmental concerns are widespread. You will probably have opinions about many of these issues but are your financial products consistent with your principles and values?
You may not know the answer to this question as most of leave financial institutions to decide where to invest our money. Do you know where your money is being invested?
The primary concern of most fund manager is to provide above average returns. Generally speaking they are not necessarily concerned how companies make their profits or increase their share values. The pursuit of profit may have been followed without regard to social, environmental or ethical constraints. This means you may be supporting something that you do not agree with and possibly strongly object to.
It is possible for your financial products to express your values through funds with specific ethical and environmental criteria. The origins of this date back to the eighteenth century. Since the mid 1980s there has been an increase in the interest of socially responsible investments (SRIs), which combine investors’ financial objectives with their concerns about social, environmental and ethical issues. The availability has increased with demand.
There are several approaches to ethical and socially responsible investment. For example with “Negative Screening” a company may be excluded from a fund due to negative criteria - involvement in say tobacco or arms production. With “Positive Screening”, a company is included in a fund due to positive criteria - activities which are positive; for instance sustainable forestry or energy conservation. And “Engagement”, which is not a screening process but is based on the principle that ownership of shares in a company allows an investor to engage in dialogue and challenge companies which are seen to be falling short in social, environmental and ethical standards.
If you are concerned about what you may be inadvertently supporting you should decide look at the issues you are concerned about, and how strongly you feel about them, and contact Langtons to discuss SRIs.