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Demand for ethical investments growing



There is money to be made in sustainable and responsible finance, insists ethical trade body UKSIF



9 Nov - 13:59

The second week of November has been designated National Ethical Investment Week by UK Sustainable Investment and Finance (UKSIF), the trade association that seeks to convince investors there is money to be made in sustainable and responsible finance.

“While many of us would go out of our way to avoid unethical products, ethics are often not considered when it comes to finances, but the same principles should apply,” argues Nick Scarrett, head of investment and pensions at online financial comparisons web site operator Fair Investment.

“If you care where the coffee you drink comes from, then you should care how your money is being invested," Scarrett believes.

Ethical Investment IntroIn an environment where the UK economy has been battered by the near collapse of the global banking system, and the threat of redundancy hangs over a significant proportion of the workforce, the question arises whether ethical investment is a conscience salving exercise that the average investor can afford.

Others might argue, can society afford not to be more ethically minded? Penny Shepherd, chief executive of UKSIF, hints that had ethical investment been the norm then the credit crunch might never have happened.

“After a decade that almost ended in global financial meltdown, attitudes are changing from greed is good to green is good - less Gekko more Eco,” Shepherd claimed, in a reference to the “greed is good” character Gordon Gekko, from the 1987 film “Wall Street”.

UKSIF maintains that irrespective of the current economic environment, the demand is there for more ethical financial products, with figures from polling organisation YouGov suggesting 54% of all UK adults want to make money while also making a positive difference to the world.

However, the YouGov survey also suggested that 40% of the adult population is unaware that green and ethical alternatives are available on a broad spectrum of financial products.

Even among those who are aware of products such as ethical ISAs and green funds, there are doubtless many who assume that these products cannot compete with less “feelgood” products.

Ethical Investment Main

Sue Round, head of investments at Ecclesiastical Investment Management, says that is not necessarily so. “The performance of our ethically screened Amity range of funds is evidence of why investors should not shy away from the ethical sector based on the outdated premise that investment in these funds leads to lower returns."

"The reality is that ethical funds can perform very highly and compete for the top spots in fund ranking tables overall,” Round claims.

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