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People who reject ethical investment are ‘not going with their values’

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Back in January, we conducted a survey – offering readers the chance to win a tablet or a charity donation in return for telling us what they thought about us. Vanessa Kelley, a financial adviser at Barchester Green, was the lucky winner, and donated her £269 to the Animal Protection Agency (APA).

A small charity, the APA’s main concern is the exotic pet trade – focusing on lobbying politicians to impose greater regulation on the industry, so that only suitable animals are allowed to be kept as pets.

Vanessa Kelley, a stalwart of the ethical financial advice industry for over two decades, spoke to Alex Blackburne about how best to communicate ethics to potential investors.

How did you get involved in ethical financial advice as opposed to financial advice more generally?

Twenty-something years ago, I worked for a major insurance company. I offered my services to members of the anti-animal testing group, the British Union for the Abolition of Vivisection (BUAV), offering to donate half my commission back to BUAV for clients that supported them.

When I had enquiries from clients who wanted to work with me, I noticed that all of the funds I could offer invested in pharmaceuticals that tested on animals, and indeed other industries that exploited animals. So I realised that I could not help those particular people. That led me into becoming interested in ethical investment.

Why should people consider investing ethically?

I think that most people have got some concerns about where their money is invested. But unless they invest ethically or explore those areas, then they may well be investing in areas they don’t believe in.

I also think the prospects of ethical investment are particularly good, particularly areas such as environmental improvement and sustainability. And  since we’ve had the issues with the banking sector and large pay awards to people who haven’t done particularly well more people have become concerned about corporate governance and extending this to other ethical and environmental issues.

Ethical investment is a widening market. I’ve been doing it for over 20 years, so I’ve seen changes in the industry and in people’s criteria, as well as a widening of people who want to take their ethics into account.

What changes have you seen since you started giving ethical financial advice?

When I first started, ethical investments were the predominance of religious investors. This was a major factor, and the criteria were quite limited: gambling, pornography, alcohol and so on. But things like the environment and the treatment of animals became areas of concern as ethics evolved.

It’s just become a wider circuit, as it has in the world really. We’re all much more aware of the environment now. I look back 20 or so years ago, and we looked at funds like Jupiter’s Ecology Fund, which was at the fore of environmental issues. It was thought of as a bit of a ‘hippie’ investment by the conventional finance sector, but actually when you look at the sort of companies it invested in these are now held some conventional funds.

Vanessa Kelley

Do you think there’s a compromise to be made between getting a strong financial return on your investment and doing the right thing ethically?

I think it depends on the fund. If you’ve got good experienced fund management and knowledgeable in house research team, the performance should be competitive anyway.

I’ve found that the stricter ethical funds, with fund managers that are much more experienced, have actually performed better than those funds that perhaps just pay it lip service because they feel they should have an ethical fund. Those funds haven’t in general done particularly well.

Do you think the sextet of sin – the six stocks historically avoided by ethical investors (alcohol, gambling, tobacco, armaments, pornography and nuclear) – is still relevant today?

I do, but I think that there are certain things that need to be included that aren’t.

I’ve got my particular concerns over one industry that I think is pretty much swept under the carpet, and most people are not knowledgeable about the effects, and that’s the meat and dairy industry. There’s lots of talk saying that it’s the number one industry causing environmental damage.

And also, the fact that we’re growing so much food to feed animals that pound by pound doesn’t work or justify itself. I believe this is an issue that needs to be considered by fund managers and anyone concerned about the environment. I think it needs to be brought to the fore a lot more.

There is a real danger to food sustainability and investment in alternative [non-animal sourced] foods with a lower carbon footprint are an area that’s needs to be seriously researched and supported.

What is stopping ethical investment from truly taking off in the UK?

If I look at it 20 years ago compared to what it is now, then I think it’s taken off well. But there is still a lack of knowledge by many investors. Unless you’ve got a specialised adviser or companies really pushing this, many people just don’t know where their money is invested.

I meet with people that are conventional investors, and they’re quite surprised when I talk about areas that their funds might invest in. The general answer from these people is, “I wouldn’t want to invest in those areas.” But they’re not told of the issues so they aren’t aware.

When people either pick a fund themselves or they see an adviser, too few advisers actually say, “You might be invested in these areas, is that a concern for you?” It’s just about getting the information out there. There’s a lack of knowledge and communication. 

What needs to be done to make ethical investment mainstream?

I think that really, the information has to be out there and there has to be a lot more honesty. Look at animal testing, for example, most people have no idea of the products and ingredients that are  tested on animals, or the actual tests that are carried out, many people do not even realise this testing is going on.

I think that for products that test animals, it should be stated that they test. Maybe, it will never happen, but I wonder what would happen if funds had to state “We might invest in arms companies” and so on.

There has to be a lot more transparency of where companies and funds are investing.

What’s the biggest consequence for people who don’t invest ethically?

They’re not going with their own values. Talking about the future of planet is probably a little bit too much, but we all need to be conscious that we need to do things. And part of what we need to do is look at where we invest and spend our money.

A lot of people when spending money might opt for fair trade goods. We need to extend that to money.

I come across a lot of people with investments who are shocked about where their money is invested. For example, there aren’t many people who would tolerate a company that uses slave labour however without the information they may well be investing in that very area.

Previous interviewees include:

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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