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Invest ethically, reap prosperity

Making your money grow whilst helping to save the planet: sounds like the perfect combination right? Alex Blackburne finds out all you need to know about ethical investments.

Ethical investment is one of the fastest growing sectors in financial planning in the UK, with over £11billion of public money tied up in ethical funds.

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Making your money grow whilst helping to save the planet: sounds like the perfect combination right? Alex Blackburne finds out all you need to know about ethical investments.

Ethical investment is one of the fastest growing sectors in financial planning in the UK, with over £11billion of public money tied up in ethical funds.

This figure, calculated by the not-for-profit ethical investment research service EIRIS, has almost trebled in the last ten years.

The rise in demand for ethical investments is down to more people recognising the importance of investing ethically, and subsequently acting upon it.

In fact, figures released last week as part of National Ethical Investment Week (NEIW) show that 42% of adults in Great Britain want to ‘make money and make a difference’.

Mark Robertson, head of communications at EIRIS, explained the reasoning behind the rise in prominence of the sector.

Since the credit-crunch, people are better informed about the impacts that their spending and investments can have, both positive and negative, and more of us are turning to ethical investmentwhich takes a longer-term approach,” he said.

By avoiding companies with a negative impact, or focusing investment on those providing positive products and services tackling key sustainability challenges, green and ethical funds offer the opportunity to both make money whilst tackling global problems.”

However, UK Sustainable Investment and Finance (UKSIF), who run NEIW, also found that 55% of adults with investments in the UK said “they did not clearly understand what their savings and investments support”.

So, to cater to that group, as well as the 36% of adults with investments “who wanted to know more about impact investing”, what is ethical investment all about?

Ethical Investment

In a nutshell, it means investing in companies which have moral, social and environmentally responsible practices, and/or ruling out any organisations that invest in tobacco, guns or oil, for example.

Animal testing, child labour, genetically modified (GM) crops and producing excessive carbon emissions are other practices which are considered unethical.

The UK’s first ethical unit trust was launched in 1984 by Friends Provident – a year after the establishment of EIRIS – and was labelled a Stewardship Fund.

It may be possible to trace ethical or socially responsible investment back to the 18th century Quakers, although many believe the sector was created in the 1950s, around the time of the Vietnam War.

Back to 2011, and the criterion for modern-day ethical investment varies from fund-to-fund, but shades of green are used to measure the level of strictness.

’Light green’ funds are generally more adaptable when it comes to selecting stocks, and tend not to have rigid guidelines for investors, whilst a ’dark green’ fund is usually more inflexible in its ethical requirements, and in contrast tends to have rigid guidelines in place.

In order to establish whether or not an investment is ethical or not, the sector primarily uses a method called ‘negative screening’.

This involves investigating a company and specifically highlighting the unscrupulous investors, from such things as companies with a poor human rights record, to those dealing in the alcohol or tobacco industries.

It’s about emphasising the unethical dealings within a company.

On the other hand, there is ‘positive screening’, which, as you can probably guess, is where the sector highlights ethical companies – this time focusing on areas such as good ethical employment practices, pollution control and all things to benefit the planet – to determine a company’s ethicalness.

Mike Head, consultant at the Ethical Investors, explained that there was a crucial link to be made when it came to investing ethically.

The key issue with ethical investment is making the connection between money and morals; how many anti-war protesters hold arms companies in their pension or ISA?

How many individuals [who don’t actively seek ethical investment] are indirectly but unknowingly holding shares in banks?

Ethical consumers often avoid activities in the retail arena but completely miss the same action with their money.”

Ethical ISAs

Mirroring the rise in popularity of ethical investment is the ethical ISA – a tax-free way of saving money,but with one important difference from the regular version, in that your money is used to invest in purely ethical funds.

Isa.co.uk explains how, “Ethical ISA funds are used to invest in unit trusts, gilts, the stock exchange, life assurance and many other similar ventures”, as opposed to possibly investing in tobacco, weapons or oil companies which non-ethical funds might do.

The rates for ethical ISAs might not be the best on the market, but your morals certainly won’t be blemished, with Triodos, one of the leading providers of ethical funds in the UK, boasting how they “only [finance] enterprises which create social, environmental or cultural added value”, in sectors such as “organic food and farming, renewable energy, social housing, and fair trade.”

Ethical Financial Management company, the Ethical Investors, label ISA providers as either neutral or positive, depending on their ethical stance.

Neutral providers are companies such as building societies, who the Ethical Investors deem to be, “Ethically neutral as they do not undertake direct lending to companies and the society exists to benefit its members, rather than shareholders.”

As of October 2011, Leek United, Stafford Railway and Harpenden make up the top three neutral providers on the table.

Meanwhile, positive providers, “Positively vet their customers (meaning those that they loan money to) on social, ethical or environmental grounds,” with Triodos, Ecology Building Society and the Co-operative Bank/Smiletopping the list.

Jon Lee, Business Development Manager at Ecology, explained how where they invested money was the central point to whether or not they subsequently received investment.

We asked our members why they chose to save ethically with us earlier this year and found that for 40% of them, trust in how we manage their money and confidence in where it goes – and where it doesn’t – was the most important consideration.

Equal numbers felt that knowing their investment would be put to work specifically towards helping projects that improve the sustainability of our built environment was the top priority.”

Ethical pensions

Ethical pensions, through which an investor is able to save for the future without having a negative social, moral or environmental impact, are also increasingly popular in the UK.

As with the ethical ISAs, a concern in this sector is the return, with many doubters claiming the ethics surrounding ethical pensions often mean the performance quality is sacrificed.

Investment experts, though, deny this, with many maintaining that investing ethically carries with it no financial disadvantages in terms of performance and revenue, and can even see businesses or individual investments performing better than non-ethical ones.

The Ethical Investors’ Ethical Fund Directory, which lists the ethical funds available in the UK to individual investors, and gives ratings in the areas of Environment, Animals and Social, is a great place to start if you’re looking at investing sustainably, whilst YourEthicalMoney.org is the go-to place for all things ethical when it comes to investment, and has practically everything you need to know about the sector on its website.

Otherwise, if you want to know more, phone your IFA, if you have one, or fill in our online form and we will put you in touch with one of our expert panel of specialist financial advisers.

Picture source: epSos.de

Environment

How to be More eco-Responsible in 2018

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Shutterstock / By KENG MERRY Paper Art | https://www.shutterstock.com/g/kengmerrymikeymelody

Nowadays, more and more people are talking about being more eco-responsible. There is a constant growth of information regarding the importance of being aware of ecological issues and the methods of using eco-friendly necessities on daily basis.

Have you been considering becoming more eco-responsible after the New Year? If so, here are some useful tips that could help you make the difference in the following year:

1. Energy – produce it, save it

If you’re building a house or planning to expand your living space, think before deciding on the final square footage. Maybe you don’t really need that much space. Unnecessary square footage will force you to spend more building materials, but it will also result in having to use extra heating, air-conditioning, and electricity in it.

It’s even better if you seek professional help to reduce energy consumption. An energy audit can provide you some great piece of advice on how to save on your energy bills.

While buying appliances such as a refrigerator or a dishwasher, make sure they have “Energy Star” label on, as it means they are energy-efficient.

energy efficient

Shutterstock Licensed Photo – By My Life Graphic

Regarding the production of energy, you can power your home with renewable energy. The most common way is to install rooftop solar panels. They can be used for producing electricity, as well as heat for the house. If powering the whole home is a big step for you, try with solar oven then – they trap the sunlight in order to heat food! Solar air conditioning is another interesting thing to try out – instead of providing you with heat, it cools your house!

2. Don’t be just another tourist

Think about the environment, as well your own enjoyment – try not to travel too far, as most forms of transport contribute to the climate change. Choose the most environmentally friendly means of transport that you can, as well as environmentally friendly accommodation. If you can go to a destination that is being recommended as an eco-travel destination – even better! Interesting countries such as Zambia, Vietnam or Nicaragua are among these destinations that are famous for its sustainability efforts.

3. Let your beauty be also eco-friendly

eco-friendly

Shutterstock / By Khakimullin Aleksandr

We all want to look beautiful. Unfortunately, sometimes (or very often) it comes with a price. Cruelty-free cosmetics are making its way on the world market but be careful with the labels – just because it says a product hasn’t been tested on animals, it doesn’t  mean that some of the product’s ingredients haven’t been tested on some poor animal.

To be sure which companies definitely stay away from the cruel testing on animals, check PETA Bunny list of cosmetic companies just to make sure which ones are truly and completely cruelty-free.

It’s also important if a brand uses toxic ingredients. Brands such as Tata Harper Skincare or Dr Bronner’s use only organic ingredients and biodegradable packaging, as well as being cruelty-free. Of course, this list is longer, so you’ll have to do some online research.

4. Know thy recycling

People often make mistakes while wanting to do something good for the environment. For example, plastic grocery bags, take-out containers, paper coffee cups and shredded paper cannot be recycled in your curb for many reasons, so don’t throw them into recycling bins. The same applies to pizza boxes, household glass, ceramics, and pottery – whether they are contaminated by grease or difficult to recycle, they just can’t go through the usual recycling process.

People usually forget to do is to rinse plastic and metal containers – they always have some residue, so be thorough. Also, bottle caps are allowed, too, so don’t separate them from the bottles. However, yard waste isn’t recyclable, so any yard waste or junk you are unsure of – just contact rubbish removal services instead of piling it up in public containers or in your own yard.

5. Fashion can be both eco-friendly and cool

Believe it or not, there are actually places where you can buy clothes that are eco-friendly, sustainable, as well as ethical. And they look cool, too! Companies like Everlane are very transparent about where their clothes are manufactured and how the price is set. PACT is another great company that uses non-GMO, organic cotton and non-toxic dyes for their clothing, while simultaneously using renewable energy factories. Soko is a company that uses natural and recycled materials in making their clothes and jewelry.

All in all

The truth is – being eco-responsible can be done in many ways. There are tons of small things we could change when it comes to our habits that would make a positive influence on the environment. The point is to start doing research on things that can be done by every person and it can start with the only thing that person has the control of – their own household.

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Energy

Top 5 Changes You can Make in Your Life to Reduce Your Carbon Footprint

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Saving money and reducing your carbon footprint? What isn’t to love? - Image from Shutterstock - https://www.shutterstock.com/g/thodonal88

In a world, where war rages and global warming threatens our very existence, the inhabitants of earth need to be extra vigilant in their efforts to go green. This includes reducing your carbon footprint on the earth and leading a more sustainable life.

Many homeowners feel perplexed by all of the options available to reduce their carbon footprint. They may even feel (falsely) that making their household more green will fail to make that much of a difference in the fight to save our planet.

Even a single home going green has a massive impact on the environment. We can win this battle on home at a time. If you’re interested in accepting the challenge of making your household a green home, read on below for a few of the top changes you can make in your life to reduce your carbon footprint. We all stand to benefit from making the earth safer for future generations – and your wallet won’t complain when you start to see the savings in annual energy costs.

Switch From Dirty Energy to Clean Solar

The ION Solar reviews tell it all–solar is the best way to go. Whether your goal is to slash your energy bills, or to reduce your carbon footprint, the sun is a fantastic source of renewable energy.

It’s important to get past the hype from solar installers. Instead, listen to the plethora of impartial customer reviews that mention everything from a $20 energy bill, to the incredible feeling of knowing that you are doing your part by going green and minimizing harmful emissions in to our atmosphere.

The average investment is $15,000 to $30,000 for installation and purchase of solar panels. Optional battery power packs can help provide consistent power during both night and day. And many government agencies provide federal, state or local grants to help offset upfront investments in clean energy.

Depending on which installed you choose, your household may qualify for low-interest or zero interest loans to cover the up-front cost of your installation. And the loan payments are usually less than your current monthly power bill.

It really is a win-win, as home buyers are looking for homes that feature this technology – meaning solar power installation improves the resale value of your property.

Home Modifications

And there are a number of additional home modifications that can help improve the energy efficiency of your home. A programmable thermostat can better manage energy consumption from home cooling and heating systems while you’re away from home. And weather stripping your doors can help keep cool air in during the summer, and warm air in during the winter.

Of course, energy conservation starts at home. And this includes setting a powerful example for your kids. Teach your children how to close windows, strategically keep doors open or closed based on airflow, and encourage them to leave the thermostat alone – opting for adding or removing layers of clothing instead.

Unplug Appliances and Shut Off Electronics

Unplugging your appliances when they aren’t in use, such as the toaster and the coffee maker, has more of an impact than you might think. Set your TVs and stereos on sleep timers, instead of letting them run around the clock. The cumulative impact of wasteful electronic device usage is horrible for our environment – putting unnecessary strain on our electrical grid.

Recycle

One of the simplest and easiest ways to reduce your carbon footprint is by recycling. You are already throwing this stuff away anyway, right? It doesn’t take much more effort to just put recyclables in a separate container to be recycled, now does it?

Oh, and did I mention that you can earn money for recycling? Yes! Many cities and towns have recycling centers that will purchase your clean plastic and glass bottles for reuse.

Minimize Your Water Usage

Water is one of the easiest things to forget about when it comes to reducing your carbon footprint. Preserve water by turning off the faucet while brushing your teeth. Shorten your shower by a few minutes and turn down the heat on that water heater. You’ll be surprised at how much lower your water bill and your energy bill will be.

Saving money and reducing your carbon footprint? What isn’t to love?

These are just a few of the top ways that you can reduce your carbon footprint and start living a greener lifestyle. And we aren’t factoring in all of the advantages that we’ll reap from public investments in a smarter energy grid.

From decreasing your water usage, to switching to solar for your home’s energy needs, you will feel good at the end of the day knowing you are doing your part to save the future of this planet for generations to come!

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