News/Events

Be sure that your ethical investments make sense [10th March 08]

The basic principles behind the concept of ethical, environmental or social responsible investment is to enable the investor to integrate their personal values and concerns into their financial and investment objectives using financially sound investments.

There are lots of concerns about and within the environment and some are more important to some than others. You might be opposed to armaments, animal testing, gambling, nuclear industry and pollution but happy to have a drink and cigarette, or you might simply chose to invest in companies that are positive in environmental progress such as reafforestation, recycling, pollution control and try and generally help the planet, Are you investing with your head or is it gut reaction?

Well, Ethical Investment Research Service (EIRIS) the London based non-profit sustainable investor specialists, show in their News Press Release dated 29^th February 2008 that as at 31^st December 2007 there was £8.9 billion invested in Britain’s green and ethical retail funds e.g. those funds available to the general public.

When you think it was only back in 1984 that the first ethical fund was launched and now there are nearly 100 available. The UK Social Investment Forum has organised the first ever “Natural Ethical Investment Week” which will take place from the 18-24^th May 2008. The aim is to encourage everyone to consider green and ethical options.

 You can, of course, link your financial arrangements in many ways as you could invest your money into:

1. 1.  A Bank or Building Society such as the Coop Bank which has a strong ethical policy or Triodos Bank, an independent Dutch Public Company, which only lends to projects with social and environmental objectives.

2. 2.  Unit or an investment trusts which have now achieved respectability, that is, in terms of long term investment performance.

3. 3.  Individual shares choosing stocks that satisfy your conscience or if you have a large sum e.g. £100,000 plus then there are specialist stockbrokers who run Discretionary Services.

4. 4.  A Pension Fund and link to the appropriate ethical fund or indeed into an equity based Individual Savings Account (ISA)

As you can see, there are many options and these are just a few and especially as climate change will present one of the key investment opportunities of the next decade.

Ethical investing was once thought of as “just for the hippies” but is now no longer considered unusual or a niche activity. I spent 11 years with one of the largest IFA’s specialising in this field and seeing more and more clients placing their money into ethical based arrangements. Today I have most definitely seen more clients investing portions of their capital into these funds. In many cases it is a hybrid approach as they are happy for their ethical investments to run alongside their conventional portfolio.

An Ethical Investment Adviser will provide you with the information and assistance you need to make decisions which suit your personal and ethical standards. This will take into account your risk profile whether you fall into a light green or dark green category or maybe perhaps somewhere in between.

It is, as you can see, important to take advice from a specialist in this field but do remember past performance is not necessarily a guide to the future and investment values can fall as well as rise.

This article was written by Langtons - Published in the Western Morning News, This is Money, 10th March 2008