Finance

FACT The ethical finance market has doubled in value in 5 years to 11.6 billion in 2005.
FACT In 2005 spending on ethical goods and services totalled £29.3 billion, up 11% since 2004. The retail market for cigarettes and alcohol during the same period was £28 billion.
FACT An ethical investment fund topped the performance charts for UK business in February 2007.

Ethical Finance

Do we care where our money is invested?

A recent NOP pole showed that 4 out of 5 of us want to know how banks are investing our money.  Increasingly more people wish their money to be directed towards activities which have a positive social and/or ecological impact.

Is the money we invest used in a socially responsible manner as a good example of ethical finance management?

Banking with a conscience is a major growth sector in the corporate finance world.  It is no longer a marginal group.  Five billion is now held in ethical unit trusts.

Can ethical finance give as good a return as other funds?

 Yes.  The top performing ethical fund the 200 million GBP F & C Asset Management Stewardship Income Fund came in fourth place in the 3 years to 2005.

What should we avoid investing in to be socially responsible?

Avoid companies making or selling arms; gambling; the fur trade; pornography; companies testing toiletries or cosmetics on animals; alcohol and tobacco companies or companies using intensive farming methods.  Also avoid companies using child labour, having poor staff practices (sweatshops); using exploitation in developing countries (selling baby formula instead of promoting breast feeding); companies sourcing materials from non sustainable sources or with a record of pollution.  Thought could also be given to companies in the nuclear and GM sectors.

If you are in a position of funding local grants or loans do you have a checklist for those applying which contains environmental/sustainability criteria?

Companies within Shetland which have carried out a baseline scoping audit on their environmental management are more aware of their use of energy, resources and are also aware of their responsibilities of avoiding pollution and appropriately managing their waste and wastage.  They are therefore more likely to be able to become financially viable quicker and avoid unnecessary expenses and possible fines.  Help in drawing up a list of questions and in supporting companies in carrying out a scoping audit at no cost to themselves can be obtained from Waste Services on (01595) 744800.

What should I look for in a responsible company seeking investment?

General headings to examine would be positive practices in waste management (waste prevention/recycling); use of environmental technology and renewables; public transport; education; telecommunications.  Companies with good working conditions, energy efficient buildings and corporate environmental policies would score well.

An ethical investment fund topped the performance charts for UK business in February 2007.  The CIS Leaders Trust outperformed all other unit trusts.  It provided a 29.3% return to the year end January as opposed to 13.2 % returns by FTSE All Share index and a 13.3% return provided by the UK All Company sector as a whole.  Over 3 years it returned 88.6% compared with 57.5% across the sector

Back to Environmental Issues