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Good Money Week: The surprise is that anyone is ‘surprised’ that ethical investment ‘can’ be unethical

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Breaking news: the Pope is Catholic and bears fertilise the woods. A recent article in the Financial Times expressed ‘surprise’ that some ethical funds aren’t completely ethical. Some funds are more unsustainable, unethical and irresponsible than others, just like some companies and some people are. It’s a sliding scale from the darkest green to the bloodiest red.

In the run up to Good Money Week we always get a slew of newspaper articles that trot out the same tired arguments and cite the same few funds, which anyone in the socially responsible industry would probably avoid. As I wrote in an email response after this recent FT article was sent to me: “You get the pro-SRI articles, the hostile and everything in-between. Very rarely do we get a rational debate that informs, educates and entertains readers.”

It’s as if on an editorial floor somewhere in the days before Good Money Week, an editor picks a journalist at random and says: “Trot out 200-words on ethical investment being unethical and find me a couple of really egregious examples. Don’t worry about all the really good options, there’s a good fellow.” Year in, year out, the same every time. It’s beyond us why they don’t just print the same article every year and change the by-line to Troll.

Yes, it is true that some interesting companies make it into an ethical fund’s portfolio. But we have to accept in our free society that there isn’t a universally accepted view on what ‘ethical’ is. So by what universal standard of ethical weights and measures can it be confidently asserted that some ethical funds aren’t ethical?

For some investors it’s all about the sin stocks: smoking, drinking, gambling, adult entertainment, arms trade and nuclear power = bad. For some, the first four are a good night out.

Some investors disapprove of irredeemable fossil fuel companies, with their degradation of natural habitats and indigenous people, the air pollution and carbon bubbles. Other investors argue that those same companies still play a role in our economy (do you use electricity, have a gas oven, a car and use plastic?) and through active shareholder engagement can be convinced to play a greater part in the transition to a more sustainable economy. Others are working in those companies to make them more sustainable. When Shell isn’t foolishly trying to exploit the Arctic, it’s installing hydrogen vehicle fuel pumps across its ‘petrol’ stations in Germany.

Other investors still, are looking at the innovative, disruptive, fast-growth game changers in sustainability; clean technology, breakthrough healthcare and robotics, sustainable agriculture, fisheries and forestry, etc.

WHEB, Triodos, Threadneedle, Impax and Quilter Cheviot operate particularly good sustainable funds, focusing on positive themes, rather than the more classic screening of negative sin stocks. Alliance Trust, EdenTree, F&C, First State, Henderson. Pictet and Rathbone Greenbank are all good eggs from the more established ethical world. If I can scramble my egg metaphor, ‘rather a diamond with a flaw than a pebble without’.

Some funds are clearly participating in greenwashing – when an organisation spends more on claiming to be “green” than actually implementing positive environmental and social practices. This is true of ethical investment funds as it is in every single other commercial sector. Some ‘good’ ethical funds sit alongside the most unethical funds in a large asset management firm’s product suite. Can a fund be truly ethical if the company it sits under is 90% unethical?

And most people realise that companies and their advertising lie. That skin cream won’t make you more attractive or younger, something cannot be both new and improved, car emissions data aren’t worth the glossy adverts they’re printed on and everything that is labelled ethical, isn’t. So why express surprise unless you’re engaged in clickbait faux shock?

Historically we’ve take the editorial line that attacking the few bad eggs in the tiny ethical fund universe (140 funds) is lazy journalism, when there are sulphurous legions of really, really bad and harmful eggs in the mainstream fund universe (3,000+). But we’re still asked who the good funds are within the ethical universe. In our Guide to Sustainable Investment, launched on Friday, we will finally look at how the funds rate from an independent expert’s perspective.

Independent SRI Consultant John Fleetwood of 3D Investing told Blue & Green: “I suspect only a small minority of companies will ever adopt truly sustainable principles. Codes of conduct like the UN-backed Principles of Responsible Investment will always seek to be inclusive and therefore have a rather modest impact in terms of encouraging genuinely sustainable behaviour and activities. The focus is always on process – how companies operate – rather than on what the companies do.

“This matters, since I would argue that you can have the most sustainably managed arms manufacturer or tobacco company, but it means little if the core product kills people. This is at the very core of the problem as ‘sustainable’ indices and codes of conduct don’t consider the nature of the business.  Identifying companies that demonstrate best practice in ethical and environmental terms does have an important role, but so does consideration of the impact of a company’s core products and services, and so does exclusion of companies whose products and services are clearly destructive.

“Genuine sustainability requires all three approaches – exclusion, social impact, sustainability management.  This is the basis of 3D Investing which focuses on the ‘what’ of investing as much as the ‘how’, to identify those funds that are truly sustainable and those that are not.“

And then there are the growing number of sustainable alternatives to mainstream funds that the mainstream media fail to mention, such as Ethex. Ethex is an online platform that makes it easier for you to put your money directly into businesses whose mission and impacts you support, and that also offer a financial return.

Jamie Hartzell of Ethex said: “As we head into this year’s Good Money Week many of us will again be considering the ethical nature of our personal investments. This is never a simple task – if you want more than the skin deep you have to dig down to find the true information.

“Ethex makes all that easy – our aim is to make positive investment easy to do. And the good news is that there are now a handful of funds with a genuine interest in reporting their social and environmental outcomes. This is an exciting development and we’re looking to get these funds on Ethex soon so we can widen the positive choices available to investors.”

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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