Peter Green, chief executive of Healthy Investment, said, “As one of the oldest providers of ethical investments, with our roots in the 19th century, we are aware that people now, more than ever, want to invest their money in a way that has a positive impact, and to find a home for it that chimes with their values.

“There are, however, many different ethical funds out there. Like all investments, they carry a degree of risk, and different products will be appropriate for different people, so we have put together some pointers for investors who want an outcome from their money that is ‘good’ for them as well as for wider society.

“If in any doubt your financial adviser will be able to help as they will want to understand your attitude to ethical investing before they make their recommendation”.

Exclude or engage?

The traditional approach to ethical investment is to avoid investing in business sectors whose activities are considered harmful. In recent years, however, there have also been moves to use investors’ clout as shareholders to affect the behaviour of what might be termed ‘bad’ companies in benign sectors. This has to involve a level of realism: shareholders are unlikely to stop a tobacco company selling cigarettes but they could, potentially, use their influence to stop a clothing retailer exploiting its suppliers. Investors should, therefore, check how the funds in which they plan to invest approach exclusion and engagement.

Accentuate the positive?

A recent development in ethical investment is known as “impact investing”. This involves not just avoiding bad companies but also actively seeking out opportunities to invest in companies and projects that have a social or environmental benefit. An obvious example would be investing in companies engaged in environmentally sustainable energy generation.

It isn’t easy being green.

If you invest in a fund operated by an investment manager or life insurance company then there will inevitably be compromises to be made because you are pooling your funds — and your ethical values — with other investors. You might be implacably opposed to gambling and entirely relaxed about alcohol, but you may struggle to find a fund that excludes only one of these. There could also be more complex ethical trade-offs. You might believe passionately in research into vaccines and treatments for diseases like malaria but also have a moral objection to animal testing. These two priorities would usually be incompatible, so you would need to think hard about which of your values should take precedence.

How ‘good’ is the fund manager?

Some institutions and fund managers specialise in ethical and environmentally sustainable investments. Others do not but might offer one or two “sustainable” funds alongside their conventional range. In the latter case any profit on the fund management charges you pay will be available for that company to use to subsidise activity with which you might be less comfortable.

It’s not charity.

Ethical investment is, first and foremost, an investment. This is your financial future and you should approach it with the same rigour as any other investor would. The ethical/socially responsible investment sector is rapidly becoming mainstream and there is no reason why you should not be able to find options that work for you financially as well as ethically.


Make sure that you understand your attitude to, and capacity to take, risk and that the investments you make are in line with this.  If you are in any doubt then please speak to a financial adviser.

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