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Church of England, Wonga and ethical investment: what the last week has taught us



It’s a week since it was revealed the Church of England invested indirectly in Wonga – the payday lender that the archbishop of Canterbury had vowed to “compete” out of business through credit unions backed by the church.

In the immediate aftermath, a frenzied British media asked such questions as, “Can investments ever be ethical?” and made such unsubstantiated comments as, “There is no such thing as an ethical investment.”

The church’s Ethical Investment Advisory Group (EIAG) justified the Wonga investment by saying it was in a pooled fund that it had little control over, and amounted to just £75,000 – or 0.3% of the fund.

To shed further light on the situation, and to assess what the last seven days have taught us, Blue & Green Tomorrow spoke with Simon Howard, chief executive of the UK Sustainable Investment and Finance Association (UKSIF).

What do you think is the key lesson that private and institutional investors should take from the last week?

The key lessons are the need both for transparency and for good process. Institutional asset owners should ask managers for full reporting and be prepared to pay for support in assessing that reporting and ensuring compliance with their requirements.

Individual investors should ask to see full lists of portfolio holdings and look to see up to date reporting/detailing of fund manager policies on websites.

The BBC asked, “Can investments ever be ethical?” and the Telegraph’s Questor column answered, “There is no such thing as an ethical investment.” How would you respond to Questor’s answer?

I don’t think ethics are an absolute; everyone must develop their own views. As such, the BBC and Questor questions fall into the definitional category rather than the practical.

I believe that investment can do good or ill, that some activities should not be funded because of their environmental – including climate – or social impact, and that anyone who tries to reflect this in their investments is doing the right thing.

Increasingly too, fund managers and companies understand the risk to share prices from poor practice in terms of environmental and social behaviours. The need for sustainable as well as ethical investment is becoming better recognised across the investment chain.

Does the presence of unsustainable and unethical industries in ethical funds damage the reputation’s industry?

As I say, I think ethics are not an absolute in the real world, and I would imagine most of the investments will only be unsustainable and unethical in the eyes of some people.

I would be surprised if anything generally held to be unethical were in the funds. Clearly holdings that are debateable can be used to undercut the practice of ethical investment but I don’t think they undercut the need for it or its aspirations.

Ethical funds often say they hold potentially unsustainable or unethical stocks so they can change that particular firm from within – using their rights as a shareholder to make it more sustainable and ethical. What are your thoughts about this justification for this kind of investment?

I think engagement of the type envisaged can be productive. The impact would mainly depend on the particular company, the objectives of the engagement and the vigour with which it is pursued.

Some fund managers prefer not to give details of their engagement; clearly that wouldn’t be appropriate in the situation you outline.

We often ask, and are asked, how we make sustainable and ethical investment mainstream, but what we want to know is how we make mainstream investment sustainable and ethical.

There is nothing wrong with seeking to engage with a fund manager on ethical issues, but it does run the risk of getting bogged down in definitions.

In the context of making sustainable investment mainstream, I think a sensible approach is to focus on financial risk. There are clearly discernible financial risks in many sectors stemming from climate change and resource depletion and fund managers can be asked to explain how they handle these.

There are also clear risks inherent in supply chains and production methods from social issues such as child labour and human rights, and there are very potent PR risks from sourcing from counterparties where the investee company isn’t on top of health and safety issues.

Managers should be able to answer how they assess and mitigate these risks. UKSIF wants all owners to be better able to reflect their values in their investments – that’s what our National Ethical Investment Week and Ownership Day campaigns are all about – and engaging on ethics or risk are simply two ways of doing that.

Creating a stable, clear policy framework that rewards long-term investment decisions is also vital for creating the signals that encourage mainstream investors to look more closely at sustainable and ethical investment.  This is why it is so important for the industry to engage with politicians, regulators and officials on these issues.

Further reading:

Archbishop ‘embarrassed’ at Church of England investment in Wonga backer

Wonga, the archbishop and the Ethical Investment Advisory Group: interview

For a church, fiduciary responsibility should not trump social responsibility

Is a little sin tolerable? Ethical investment and searching for the good

Wonga (5,853% APR), Wongate, Wronga or just plain wrong


How Going Green Can Save A Company Money



going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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5 Easy Things You Can Do to Make Your Home More Sustainable




sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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