What is Ethical Investment?
Ethical Investment has been defined as putting your money where your morals are, or investing according to your beliefs. The term "ethical investment" has been in circulation for over 20 years, since the first UK ethical fund was launched in 1984 by Friends Provident. The idea behind the ethical philosophy is that the fund manager will pick companies that have the potential to do well both socially and financially. The following points may be of interest:
1. "Research conducted by Jupiter shows that clients rate climatic change, bio-diversity and pollution as the most pressing environmental concerns. 59% believe that the UK will be significantly affected by climate change and more than two thirds put the responsibility for limiting these changes at the door of both individuals and governments."
2. 29% of investors questioned by Jupiter were already invested in a green fund. Of those who had not invested ethically, 24% said this was because they were not aware ethical funds existed. 21% expressed concern that ethical investing could adversely impede performance.
3. Increased awareness and changing buying patterns of investors demonstrates that far from producing below average returns, investing ethically has the potential to boost returns going forward. This can be explained in many cases by a "virtuous circle" developing among consumers, corporations and governments increasing the demand and supply of environmental solutions. Government incentivisation through taxation incentives are helping businesses become increasingly green. Companies have identified compelling opportunities within this sector and are developing increasingly environmentally friendly produce.
4. Not just for tree huggers
Your investments my go down as well as up. Past performance is not a guide to future performance.
Financial Future Associates LLP is an appointed representative of IN Partnership the trading name of The On-Line Partnership Limited which is authorised and regulated by the Financial Services Authority.
