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It’s time to pull our heads out the sand, says SWIP fund manager

Craig Bonthron, co-manager of the SWIP Islamic Global Equity Fund, believes that the best way to solve world resource constraints is to invest sustainably. Bonthron describes his fund, which consults sharia law when choosing its investments.

Ethical funds usually have at least one common aspect, insofar as they vet the companies they each invest in. Whilst each fund opts for different investment angles – mostly at the discretion of the fund manager – some funds are governed by a higher power.



Craig Bonthron, co-manager of the SWIP Islamic Global Equity Fund, believes that the best way to solve world resource constraints is to invest sustainably. Bonthron describes his fund, which consults sharia law when choosing its investments.

Ethical funds usually have at least one common aspect, insofar as they vet the companies they each invest in. Whilst each fund opts for different investment angles – mostly at the discretion of the fund manager – some funds are governed by a higher power.

One such vehicle – the Scottish Widows Investment Partnership (SWIP) Islamic Global Equity Fund – uses the teachings of Sharia law to decide which sectors and companies make up its portfolio.

For those unaware of Sharia law, the BBC offers quite a handy definition:

“Sharia law is Islam’s legal system. It is derived from both the Koran, as the word of God, the example of the life of the prophet Muhammad, and fatwas – the rulings of Islamic scholars.

“But Sharia differs in one very important and significant way to the legal traditions of the Western world: it governs, or at least informs, every aspect of the life of a Muslim.”

The SWIP fund styles itself towards this market, and because Sharia law forbids the payment or acceptance of interest, it’s important that its stock selection is carefully chosen.

This isn’t to say, though, that it’s open solely to Muslims.

“Anybody can invest in it”, explains Craig Bonthron, co-manager of the fund with Johnny Russell.

“I guess the naming convention – the fact that it’s called an Islamic fund, which is the specific reason it was set up – may fall off the radar of the normal investor, but it’s very appropriate for a lot of ethical investors because under Sharia law, you’re also excluding tobacco and alcohol, and so it becomes more like a traditional ethical fund.

“If you were looking at the stocks from the sector breakdown, you might not even notice it wasn’t an ethical fund.

As one of the longest running Islamic equity strategies available in the UK, having been set up in November 2005, the fund was originally established to give Muslims the chance to hold investments, because Sharia law tends to make it quite difficult to do so.

Within SWIP’s global equity team, there are ten analysts, each responsible for a different global sector. Once a potential company is flagged up, the team points the fund managers in the right direction.

If the company passes the Islamic screening, it’s then up to the managers to decide whether there is an investment opportunity and the board of scholars to decide whether it is appropriate for the fund.

The Islamic Global Equity Fund is benchmarked against the Dow Jones Islamic Index, as well as the MSCI World Index. Catering to the Islamic market’s requirements, companies are selected based on their interest – in order to satisfy sharia law.

“When a stock is included in the Dow Jones Islamic Index, that’s the starting point of whether we can invest in it”, says Bonthron.

“The board of scholars will take a quick look at it and meet, and if it’s in that index, it’s usually a quick decision, but if it’s not, then it would take longer to have a close look at the stock and make sure it fits into the various criteria.

“Pragmatically, there are no stocks that you could invest in that have zero interest income or interest expense. Most companies take on some form of leverage or debt.

“The basic rules are no more than 30% debt-to-equity ratio, and there are limits on the amount of interest income and interest expense that can be generated by the business.”

The fund’s sector weights are significantly different from its benchmark. The energy sector in the Dow Jones Islamic Index contributes to about 18%, whilst in the MSCI World Index, it’s more like 12%. The SWIP Islamic Global Equity Fund has about 20% of its stocks in the energy sector.

Healthcare is the same. It makes up 25% of the SWIP fund, but 17% in the Dow Jones Islamic Index, and only 10% in the MSCI World.

Because Sharia law prevents capitalisation on interest, the SWIP fund has zero weight in financial companies, versus the MSCI World, which has about 17% weight.

With these sectors in mind, ultimately, ethical or sustainable investment, says Bonthron, is about solving global concerns.

“There are problems that need to be solved and we can no longer stick our heads in the sand and ignore these issues”, he stresses.

“Resource constraints are becoming clearer and clearer. We need to find alternative sources of energy, we need to find more efficient ways of disposing of our waste, and we need to find more efficient ways of finding water, using it efficiently and returning it to nature in a clean way.

“So there are clearly a lot of resource constraints and demographic issues throughout the world that we need to solve, and one of the best ways of doing that is to invest capital behind it, and allow companies to focus on that and provide solutions.

“This is as much about solutions for us as it is about avoiding bad stuff.”

By opting for vehicles such as the SWIP Islamic Global Equity Fund, your money can start making a positive difference rather than funding unsustainable practices.

For more information on the fund, have a look at the factsheet and visit SWIP’s website.

Alternatively, fill in our online form and we’ll connect you to a specialist ethical adviser who can help you.

Previous fund profiles:

IM WHEB Sustainability Fund
Kames Capital Ethical Equity Fund
Quadris Environmental Forestry Fund
Ludgate Environmental Fund
7IM Sustainable Balance Fund
Allianz RCM Global EcoTrends Fund
Cheviot Climate Assets Fund
Skandia Ethical Fund
Premier Ethical Fund
SVM All Europe SRI Fund


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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