Ethical Investing

Ethically influenced purchasing decisions are now firmly established as part of everyday life. The use of labels such as ‘fair trade’, ‘organic’, ‘ethically traded’, ‘recycled’, ‘sustainable’ and ‘low carbon emissions’ is on the increase, as both businesses and individuals recognise their benefits.

What is ethical investment?

Ethical, or Socially Responsible, Investment offers the opportunity for investors and savers to avoid the companies whose activities they would not want to support, and invest in those operating within a moral framework that reflects their own moral stance.

The first ethical investment fund in the UK was launched in 1984 by Friends Provident as a direct result of their Quaker roots. 30+ years later there are dozens of funds from many of the UK’s leading fund management groups. Whatever your concern, people, planet, animals, faith, there is now an ethical fund that will match your views. The concept of ethical is going to vary between individuals, and in our experience there are certain key moral issues that are deemed to be beyond the pale for all investors, but beyond that it is possible to apply more personalised and bespoke views upon the manner in which one’s money is invested. This includes, for an increasing number of investors, not just avoiding certain activities but actively investing in a positive way; to support companies contributing to a sustainable future. Time has proved that investing ethically is not a handicap to investment performance; it is actually a significant benefit.

Many investors with social, moral or environmental concerns have yet to make the link between their areas of concern and their money. The link is, in reality, quite simple; if you do not actively choose to invest in a socially responsible fund, most, if not all, of your concerns will be compromised by your investments. So, the next time you are reviewing your financial arrangements – banking, pensions, life assurance, savings, ISAs etc – take a step back and look at whether you are financing companies whose activities you are against, and whether you are actively investing in your future, of that of your children, where you believe you will make a positive difference. It is your money and your choice.

Sound financial strategy…

Investing in an ethical and socially responsible way is now acknowledged as a sound medium to long-term strategy, with the rapidly increasing trend for individuals, charities and companies is to seek profit responsibly via ethical investment. It is important to remember that much of Socially Responsible Investment concerns the positive sides of business life such as respect for the community (local and global) and for the environment. Many people now believe that in troubled times, an enlightened attitude to our responsibilities to future generations is imperative in business, if a company is going to survive.

How can I invest ethically?

Many of us at some time in our lives will need at least one of the contracts listed below and any of these can be linked to a socially responsible fund. The contracts available include:

Generally speaking, the criteria used to select a company considered suitable for a socially responsible fund can be split into two groups. The first are those which make a positive contribution, while the second are those which are known to have a negative social or environmental effect.

What are the criteria?

Generally speaking, the criteria used to select a company considered suitable for a socially responsible fund can be split into two groups. The first are those which make a positive contribution, while the second are those which are known to have a negative social or environmental effect.

The positive…

Positive selection will result in support and encouragement of companies that are associated with the following:

The negative…

Negative selection can result, where required, in the avoidance of companies linked with any or all of the following:

Ethical investors are not all the same, so AGL believes it is important to offer investment solutions that address the diverse needs of investors who are interested in areas such as these. This is why we recommend that all clients with ethical views complete an ‘ethical question’ in their standard fact find and have processes in place to meet clients’ ethical aims and objectives as appropriate.