Invest ethically

What is ethical investment?

Ethical investment is the name given to investing for capital gain or income as is the case with all types of investment but with ethical investments other aspects are valued, where consideration is given to the underlying activity of the businesses that constitute an investment return.

This will typically mean that certain businesses will be excluded from the potential pool of companies that may be considered, for example, those involved in the tobacco or armaments trades. This exclusion can be tailor made to reflect your core values, or a fund can be identified that most closely reflects these values.

Usually exclusions have been around businesses involved in armaments, oil, and animal testing of medicines and cosmetics, nuclear industry and pornography and in recent cases the banking industry. Over the years, ethical investment has developed and investment managers have looked at the long term sustainability of the businesses that they invest in and as an example, labour relations have become an increasingly important factor.

Increasingly the issues surrounding climate change are factors that identify areas of investment growth. For example a business that improves the fuel efficiency of the motor car will be in demand as will a business that reduces the loss of electricity in a national transmission system.

This is also true of businesses involved in waste production in the developing world that increasingly needs to deal with their rubbish. It also focuses upon the shortages of basic commodities including the increasing need in the world for water and food.

We are of the opinion that ethical or socially responsible investment will provide above average investment returns, as it identifies new markets and growing markets throughout the world.

Find out more about ethical and green investment, our strategy for ethical and green investment and about ethical and green funds