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Ethical investment has blossomed into a viable and lucrative strategy



Ethical investment is becoming the chosen vehicle for many investors who demand more than just financial growth from their money, writes James Howard of Emerald Knight.

Since the near collapse of the banking system and rapid decline in the global stock markets, there’s been increasing concern over the stability of traditional investments which people have often relied upon heavily as their ‘nest egg’. And there’s much better awareness of how financial institutions use their customers’ money, driven by concerns about issues such as climate change, human rights, and deforestation. As a result, the nation is becoming increasingly aware of the impact of its choices.

Just how much is reflected in figures from EIRIS, the non-profit sustainable investment research specialists. These show that the amount of money invested in Britain’s green and ethical funds recently reached a record height of around £11 billion, up from £4 billion 10 years ago. And over the last decade, the number of ethical investors has tripled, from 250,000 to three-quarters of a million.

There’s also evidence to suggest that recent issues in the banking sector, such as the Libor rate-rigging scandal and executive pay, have led to more people than ever reviewing ethical options. The Move Your Money campaign, for example, estimates that 500,000 people chose to move their bank account to a more ethical provider in 2012.

The investment options

As regards investment options, you can choose to invest directly into companies or projects which meet ethical criteria, or look at ethical funds which can be growth or income generated.

There are several different types of projects to consider, and one of the most popular at the moment is carbon offsetting, where you help to fund a project which will reduce or remove a metric tonne of carbon emissions from the atmosphere. The company involved will package carbon dioxide emission reduction units into credit bundles that can be purchased as carbon credits.

There are many other investments, too, from social housing projects in Brazil which are helping to solve the country’s major housing deficit, to projects that invest in bamboo plantations in Central America.

When it comes to funds, there are a large number available and they’re often categorised in various shades of green, depending on the criteria they apply to their investment decisions. A dark green fund is a term used to describe a fund which applies strict negative screening before investing in a company, and excludes companies involved in unethical practices such as defence or pharmaceuticals. A light green fund is a term used to describe a fund which uses positive screening and invest in companies which are making a positive contribution to the environment, or which have a good ethical track record.

Some funds combine both screening methods with a best-in-class approach. So, while a company may invest in the oil and gas sector, it will only invest in those which are doing the most to limit their environmental impact, or to improve their ethical performance.

Other funds engage with companies by using the manager’s power as a shareholder to positively influence corporate behaviour regarding areas such as the environment and human rights.

You can have profits and principles

There’s still a widely held perception that investing ethically means having to sacrifice financial performance, but the two can actually go hand-in-hand. In terms of recent performance, for example, the Jupiter Responsible Income Fund has achieved a total return of 33.08% over the last three years, and become a top quartile performer in the UK equity income sector.

Despite the perception that the ethical investment is considered to be a fairly recent phenomenon, the concept actually goes back hundreds of years when the Quakers banned members from investing in the slave trade. Even until fairly recently, investors who chose to invest in ethically-minded products were often perceived as a periphery group. But the concept has blossomed into a viable and lucrative investment strategy.

And it appears to be breaking into the mainstream. This is borne out in our own research which shows that 60% of us would be interested in investing ethically if we simply knew more about it, and 74% of us would be likely to opt for investments which benefit society and the environment, if we had the money.

James Howard is a director at Emerald Knight, which specialises in socially responsible investment. 

Further reading:

Poll maps growth of ethical investment understanding and demand

£11bn invested ethically in the UK: infographic analysis

Ethical funds performing poorly? We think not

Survey of Ethical Investment Association members: a round-up

The Guide to Sustainable Investment 2012 (NEIW edition)


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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