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Ensuring your money doesn’t do harm: the ethical investment option

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Lisa Hardman, a financial adviser at Investing Ethically, spoke with Alex Blackburne about probing investors on that all-important question: “Is that really where you want to invest your money?

Of all the reasons we’ve heard about why people should invest their money ethically or sustainably, few are as clear, concise and obvious as Lisa Hardman’s:

We make ethical decisions all the time, about what we do and don’t buy, what we associate with, how we live our lives, whether we recycle, whether we cycle to work – so why not when it comes to investing your money?

She says it as if the decision to carefully select these kind of investments is as simple as choosing which coffee brand to go for. And in essence, with the right expert knowledge, it is.

You invest money for all sorts of reasons”, she continues, “to provide income for long-term growth, for example, but money also comes with a lot of baggage.

There are lots of things that are important to people, and everybody has some ethical criteria by which they live their life.”

Hardman’s firm, Investing Ethically, is based in Norfolk, and has clients from across the country. Set up in 2000, the organisation’s cooperative business principles were inspired by its founder, Alan Kirkham’s, Quaker beliefs.

We run it very much as a flat structure, and we all make decisions about what direction the company is going to go in, so although it is a limited company, it feels like a cooperative”, she says.

We still have a monthly meeting where we go through everything that pertains the business and everybody’s involved in the decision making, so it’s very democratic in that sense.”

We don’t have business targets per se. Instead, it’s a question of whether we’re profitable and whether we’re doing the right thing by our clients, rather than having to sell so many policies a month.

It’s a very liberating place to work.”

Change is slowly happening in the investment industry

Earlier this month, a survey by Oikocredit found that whilst 61% of women and 53% of men said they would actively opt for ethically-sourced goods, only 56% of women and 44% of men would seek investments that were billed as ethical, suggesting that there is a knowledge gap in the financial world.

The main myths surrounding the sector are to do with performance, with many investors claiming that there is a sacrifice to be made by choosing ethical funds.

Hardman, like many other financial advisers that Blue & Green Tomorrow has spoken to, countered this view.

It’s fair to say that there are good ethical funds and there are not-so-good ethical funds”, she begins.

Because you’re excluding parts of the market, you do have to have a different view of where to go – you have to be more inventive with where you put your money.

Some of the insurance companies have a token ethical fund, which isn’t particularly active, and the ethical screening is maybe a little dubious, whereas there are other fund managers who take ethical investment very seriously and have very compelling funds, and ones that win awards in their own right.”

The problem, Hardman states, lies in the lack of choice. With less than 100 ethical funds available to UK investors, up against 4,000 conventional ones, an ethical investor is often not gifted with the same scale of choice as a mainstream investor.

She picks out Kames Capital and Ecclesiastical as “compelling” providers of ethical funds. Meanwhile, the Aberdeen Ethical World Fund and the Rathbone Ethical Bond Fund, are two funds that she says have performed particularly well of late.

The relative lack of choice available in the ethical investment market shouldn’t be seen as a deterrent. Instead, it should be viewed as inspiration to join a movement that really is on the verge of something big.

Change is slowly happening in the investment industry”, Hardman claims.

I was reading an article in one of the newspapers yesterday that said sustainability was now one of the standing agendas of most managers of most big companies. That has changed in the last ten years.

When you talk to clients who have concerns about ethical funds not performing, and show them what the top ten holdings are in the non-ethical funds that they hold, they’re often shocked as to the lack of any kind of ethical considerations, particularly the tobacco ones.

Most people just don’t know. It’s not to say they don’t have ethical principles; they’ve never been asked the question.”

We make ethical decisions all the time – so why not when it comes to investing your money?

That question – “Is that really where you want to invest your money?” – should always be answered with, “Yes”. If it doesn’t, and you’re unsure about whether your investments are right for you, it’s worthwhile getting in touch with an ethical IFA.

A belief relayed to B&GT by another IFA, Lee Smythe – “People are good” – is echoed by Investing Ethically’s Hardman.

Most people inherently want to do good with their money”, she says.

They want to protect the world for their children’s future, and to make the world a better place for them.

Generally, people want to do the right thing, and sometimes it’s about having enough information to make that decision, and I don’t think the conventional investment industry has made it clear to people that there is a choice for them, that there are funds out there that are ethically screened.

There are some things that we can all agree are not good for the world – whether they’re investable is a different matter – but the world is not a better place because of it, and people generally wish to avoid them.

OK, some people have very strong feelings about certain ethical issues, and you have to accommodate that as best you can, but for most people it’s about their money not doing harm.”

Ethical investment, sustainable investment, responsible investment – whatever you call investing with a conscience, opting to invest your money in this way is the smart choice, the obvious choice, and one of the most effective ways to push forward a sustainable economy.

Get in touch with Investing Ethically or fill in our online form to find out how your money can make a difference.

Previous interviewees include:

Economy

How Going Green Can Save A Company Money

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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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Energy

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

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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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