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Making the dream of ethical investment a reality

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Like many specialist ethical financial advisers, Scott Murray’s roots began in mainstream investment. He then realised he needed a change. Now managing director of Virtuo Wealth Management, he spoke about his commitment to ethical investment with Alex Blackburne.

On February 6, 1968, less than two months before he was assassinated, Martin Luther King Jr made a speech in Washington DC called A Proper Sense of Priorities. He ended with a tale about ethics.

On some positions, cowardice asks the question, “Is it safe?” Expediency asks the question, “Is it politic?” Vanity asks the question, “Is it popular?” But conscience asks the question, “Is it right?” And there comes a time when one must take a position that is neither safe, nor politic, nor popular but he must take it because conscience tells him it is right.”

For many, this quote would sum up perfectly the reasons for opting for ethical investment; ensuring your conscience is clear, your morals intact, and your investments in funds and companies that are doing some environmental or social good as opposed to bad.

But as the sector continues to experience exponential growth, being safe, politic and popular are all traits that can now be attributed to it without argument.

For Scott Murray, managing director of Edinburgh-based financial advisers Virtuo Wealth Management, though, doing the right thing ethically is at the forefront of his mind, and in turn, spearheads the advice he gives to clients. But it hasn’t always been that way.

After having experience with investments over the last 15 years, I felt that it was time for a change to be honest”, Murray explains, when asked about how he got into specialist ethical financial advice.

Don’t just accept an adviser or a bank manager’s recommendation. Challenge and ask questions about what type of funds they’re invested in, and learn about what types of fund there are

I decided that I wanted to become more involved in looking at socially responsible and ethical funds, and start to use my own views and thoughts to try and influence clients to invest in this area.”

Whereas faith and spirituality were fundamental to the teachings of Martin Luther King, an inspiration of Murray’s, he cites an increased awareness of the impact that investments can have as one of the main drivers behind his shift in morals.

He founded the business that eventually morphed into Virtuo in 2007, when, according to responsible investment research firm EIRIS, just over £8.8 billion was invested in green and ethical funds in the UK.

Fast-forward four years and by June 2011, this figure has increased by 27% to £11.3 billion, and Murray has witnessed this shift first-hand.

We all want to try and support local businesses now, whether it’s buying organic food or fair trade coffee or chocolate, providing it’s affordable to do the right thing, and I don’t see any difference with managing money”, he says.

The majority of clients I speak to are willing to look at ethical funds and are willing to commit a certain percentage to investing ethically.

It’s more than just giving people the choice; the ethical story does actually stack up.

The socially responsible investment (SRI) funds that are there can actually perform well, and they’re also looking after the planet or helping our countries in the same manner.”

Although the sector’s figures are encouraging on their own, when compared to the size of the mainstream investment industry, it becomes a tale of David v Goliath.

I think there’s just a lack of commitment [to ethical investment] from investment houses”, says Murray.

They maybe haven’t seen the large influx of money that they would like in other funds that have been launched.

Or maybe the boutique investment houses just don’t the budget to invest in this area – which can be shown by the Henderson team going to WHEB and the Aviva team going to the Alliance Trust.

I think it’s just a case of how much commitment a mainstream investment house has in this sector and whether a boutique investment house such as WHEB can commit to implementing a new fund.”

Indeed, mainstream investment houses are often accused of offering token ethical funds, some of which appear in listings alongside ones that might invest in oil companies or the arms trade. In this scenario, it’d be easy to question the firm’s commitment to ethical investment, but at the same time, the big houses have arguably the most influence across the market to effect a real change towards ethics.

Rather than the shock tactics of performance, we could be actually looking at what other funds are investing in and whether clients want to be involved with them

But being a burgeoning but fledgling sector, ethical investment is often at a detriment because there are simply not enough advisers who specialise in giving ethical-based advice.

Clients don’t have the same education with regards to what funds are available”, Murray points out.

Unfortunately, they’re getting influenced in areas that have been around 20-30 years. There’s not the same profile in ethical funds, and I think there’s a common misconception of profit dilution as well.

I don’t think there’s a compromise to be made. We’re on the planet for a certain amount of time and people should want to invest in funds that are actually going to be looking after the planet and doing the right thing.”

The misconception of profit dilution that Murray alluded to is quite simply not true anymore. Ethical, sustainable and responsible investments perform just as well (or given the current volatility of the entire stock market, just as badly) as conventional funds. This was shown most recently by an Osmosis Investment Management study, which concluded that investments in sustainable, resource-efficient companies would reap higher returns than the competition.

And this is just the latest in a long line of similar studies that clearly show the market outperformance of ethical stocks.

Another thing that Murray picks out is the media’s coverage of contentious investment strategies, such as the fact that the pension funds of a number of English councils were found to have been investing in the tobacco industry – despite many of them publicly promoting a ‘stop smoking’ campaign of some kind.

It’s that type of media coverage that we could do with more of”, says Murray.

Rather than the shock tactics of performance, we could be actually looking at what other funds are investing in and whether clients want to be involved with them.”

And it’s that on that note that Murray delivers his final thoughts about ethical investment, or rather a warning to investors to be bold when selecting their portfolios and to not just choose to toe the line.

The types of companies that are benefiting from a client’s money might not hit home.

I’d just urge people to really think about where they’re investing.

Don’t just accept an adviser or a bank manager’s recommendation. Challenge and ask questions about what type of funds they’re invested in, and learn about what types of fund there are.”

In Martin Luther King Jr’s most famous speech, he dreamt of equality, freedom and justice in the world. Ethical investors dream of true sustainability; something that can only be achieved if we all vote, consume and most importantly, invest, in ways that help the planet, its people and all of our prosperity.

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

Previous interviewees include:

Features

Ways Green Preppers Are Trying to Protect their Privacy

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Environmental activists are not given the admiration that they deserve. A recent poll by Gallup found that a whopping 32% of Americans still doubt the existence of global warming. The government’s attitude is even worse.

Many global warming activists and green preppers have raised the alarm bell on climate change over the past few years. Government officials have taken notice and begun tracking their activity online. Even former National Guard officers have admitted that green preppers and climate activists are being targeted for terrorist watchlists.

Of course, the extent of their surveillance depends on the context of activism. People that make benign claims about climate change are unlikely to end up on a watchlist, although it is possible if they make allusions to their disdain of the government. However, even the most pacifistic and well intentioned environmental activists may unwittingly trigger some algorithm and be on the wrong side of a criminal investigation.

How could something like this happen? Here are some possibilities:

  • They could share a post on social media from a climate extremist group or another individual on the climate watchlist.
  • They could overly politicize their social media content, such as being highly critical of the president.
  • They could use figures of speech that may be misinterpreted as threats.
  • They might praise the goals of a climate change extremist organization that as previously resorted to violence, even if they don’t condone the actual means.

Preppers and environmental activists must do everything in their power to protect their privacy. Failing to do so could cost them their reputation, future career opportunities or even their freedom. Here are some ways that they are contacting themselves.

Living Off the Grid and Only Venturing to Civilization for Online Use

The more digital footprints you leave behind, the greater attention you draw. People that hold controversial views on environmentalism or doomsday prepping must minimize their digital paper trail.

Living off the grid is probably the best way to protect your privacy. You can make occasional trips to town to use the Wi-Fi and stock up on supplies.

Know the Surveillance Policies of Public Wi-Fi Providers

Using Wi-Fi away from your home can be a good way to protect your privacy.However, choosing the right public Wi-Fi providers is going to be very important.

Keep in mind that some corporate coffee shops such a Starbucks can store tapes for up to 60 days. Mom and pop businesses don’t have the technology nor the interest to store them that long. They generally store tips for only 24 hours and delete them afterwards. This gives you a good window of opportunity to post your thoughts on climate change without being detected.

Always use a VPN with a No Logging Policy

Using a VPN is one of the best ways to protect your online privacy. However, some of these providers do a much better job than others. What is a VPN and what should you look for when choosing one? Here are some things to look for when making a selection:

  • Make sure they are based in a country that has strict laws on protecting user privacy. VPNs that are based out of Switzerland, Panama for the British Virgin Islands are always good bets.
  • Look for VPN that has a strict no logging policy. Some VPNs will actually track the websites that you visit, which almost entirely defeats the purpose. Most obviously much better than this, but many also track Your connections and logging data. You want to use a VPN that doesn’t keep any logs at all.
  • Try to choose a VPN that has an Internet kill switch. This means that all content will stop serving if your VPN connection drops, which prevents your personal data from leaking out of the VPN tunnel.

You will be much safer if you use a high-quality VPN consistently, especially if you have controversial views on climate related issues or doomsday prepping.

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Features

How Going Green Can Save Your Business Thousands

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Running a company isn’t easy. From reporting wages in an efficient way to meeting deadlines and targets, there’s always something to think about – with green business ideas giving entrepreneurs something extra to ponder. While environmental issues may not be at the forefront of your mind right now, it could save your business thousands, so let’s delve deeper into this issue.

Small waste adds up over time

A computer left on overnight might not seem like the end of the world, right? Sure, it’s a rather minor issue compared to losing a client or being refused a loan – but small waste adds up over time. Conserving energy is an effective money saver, so to hold onto that hard-earned cash, try to:

  • Turn all electrical gadgets off at the socket rather than leaving them on standby as the latter can crank up your energy bill without you even realizing.
  • Switch all lights off when you exit a room and try switching to halogen incandescent light bulbs, compact fluorescent lamps or light emitting diodes as these can use up to 80 per cent less energy than traditional incandescent and are therefore more efficient.
  • Replace outdated appliances with their greener counterparts. Energy Star appliances have labels which help you to understand their energy requirements over time.
  • Draught-proof your premises as sealing up leaks could slash your energy bills by 30 per cent.

Going electronic has significant benefits

If you don’t want to be buried under a mountain of paperwork, why not opt for digital documents instead of printing everything out? Not only will this save a lot of money on paper and ink but it will also conserve energy and help protect the planet. You may even be entitled to one of the many tax breaks and grants issued to organizations committed to achieving their environmental goals. This is particularly good news for start-ups with limited funds as the Environment Protection Agency (EPA) is keen to support companies opening up their company in a green manner.

Of course, if you’re used to handing out brochures and leaflets at every company meeting or printing out newsletters whenever you get the chance, going electronic may be a challenge – but here are some things you can try:

  • Using PowerPoint presentations not printouts
  • Communicating via instant messenger apps or email
  • Using financial software to manage your books
  • Downloading accounting software to keep track of figures
  • Arranging digital feedback and review forms
  • Making the most of Google Docs

Going green can help you to make money too

Going green and environmental stability is big news at the moment with many companies doing their bit for the environment. While implementing eco-friendly strategies will certainly save you money, reducing your carbon footprint could also make you a few bucks too. How? Well, consumers care about what brands are doing more than ever before, with many deliberately siding with those who are implementing green policies. Essentially, doing your bit for the environment is a PR dream as it allows you to talk about what everyone wants to hear.

Going green can certainly save your money but it should also improve your reputation too and give you a platform to promote your business.

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