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Ethical investment trebles

19 October 2012

INVESTMENT in Britain's green and ethical funds has almost trebled in the past decade, research suggests.

To mark the launch of this week's National Ethical Investment Week (NEIW) (Feature, 12 October), Eiris, specialists in sustainable-investment research, published figures that showed that about £11 billion had been invested in 80 UK-based green and ethical retail funds, compared with £4 billion ten years ago. The company's head of communications, Mark Robertson, said that the increase reflected "consumer interest in issues like climate change, fair trade, human rights, and, more recently, ethical pay".

A survey of 2183 people, of which 1291 have investments, conducted by YouGov this month, found that 24 per cent would be interested in a green bank account, compared with just two per cent last year. Forty-five per cent of those with savings or investments said that they wanted at least some of those to take ethical considerations into account.

"With the breakdown in trust, and continuing problems with the banking sector and other sectors, people are thinking about profit with principles," Neville White, an investment analyst for Ecclesiastical Investment Management, said on Tuesday. "You don't neccessarily have to sacrifice return in order to invest ethically."

Research from EIRIS, published on Wednesday of last week, suggests that investment in emerging markets has increased by almost 30 per cent since 2009, posing challenges for investors concerned about the environment.

Although stock exchanges in Brazil and South Africa have "leapfrogged" those in developed countries by requiring high levels of disclosure, poor levels of disclosure remain "the number-one challenge" for investors interested in these markets. A report produced by the company suggested that most companies from Brazil, China, India, Russia, and South Africa were "not doing enough" to mitigate this.

A financial adviser, Jeremy Newbegin, said on Tuesday that "people may consider ethical investment, but unless they see proof of good performance I think that they will be put off." Independent financial advisers are accustomed to choosing from 3000 funds, he said, compared with about 130 ethical ones. The number of funds was increasing, however, and, "if you are going to be consistent, then money should be aligned with your faith."

NEIW has produced an action guide for churches, sponsored by CCLA, a specialist investment manager for charities, churches, and local authorities, and produced by the UK Sustainable Investment and Finance Association in association with the Ecumenical Council for Corporate Responsibility.


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