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Sniping at ethical investment is an odd sport during National Ethical Investment Week

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Every autumn, the financial press spends seven short days focusing on ethical investment. The rest of the year, it returns to writing about the business of screwing over people and the planet for a percentage (or often a fraction of a percentage) of profit. Despite just 2% of the year spent covering the themes and nuances of ethical investment, the odd troll and article creeps out that pours scorn on the whole thing.

If you invest solely for profit maximisation, then look away now, as Blue & Green Tomorrow is going to let you into a little secret that might surprise or even shock you. It’s a big one, so steel yourselves.

People who invest ethically… do so for ethical reasons.  The clue, as it were, is in the name.

There, we told you it would surprise or shock you.

There are large of numbers people who invest solely for profit, regardless of the consequences or costs. There are a smaller number of more enlightened and engaged investors, who consider the planet and people, too.

Focusing on returns, performance and profit ignores the more balanced, some would say more sustainable, consideration of planet, people and profit that ethical investors choose to make

Just as there are people who bank ethically, travel responsibly or use clean energy, there are those who choose to invest ethically – for ethical reasons.

We highlighted a partial journalistic hatchet job earlier this week. The rather more impartial Dan Hyde of This is Money acknowledged that “some of the biggest ills in the modern world have been caused by a narrow focus on profit at any cost”. He then points out that “ethical funds have a sluggish record” when it comes to performance.

If ethical investment isn’t ‘strangling returns’ in one article, it’s delivering ‘sluggish’ ones in another.

This ‘strangling’ and ‘sluggish’ record is a debatable fact, as analysis by Worldwise Investor has shown us. Nevertheless, performance at any cost is not the only focus of ethical investors.

If, like us, you accept Hyde’s first argument that some of the biggest ills have been caused by a narrow focus on “profit at any cost”, you might feel tempted to ask the question, “Is there an alternative?” And you, like us, probably want the answer to be ‘yes’, which is the very essence of National Ethical Investment Week; to explore alternative, less harmful investment strategies.

But before we can even consider the alternatives and nuances in any depth, the cold water of “sluggish returns” is always, and erroneously, poured on the debate.

Only chocolate or only celery

Hyde uses a metaphor of choosing chocolate or celery to illustrate the dilemma for investors between doing what is right and what is most profitable. He makes our point for us perfectly. Chocolate is an unhealthy indulgence and celery is the healthier option. Chocolate is great, some would say divine, in small fair-trade doses, but celery is clearly better for you.

The problem with this rather excellent metaphor, writ large from an investment perspective (financial trades that outstrip real world trade 26:1), is that we are pursuing an unhealthy indulgence on a planetary scale.

People are dying right now, because of what we invest in, biodiversity is being destroyed and we are rapidly depleting the finite resources that our economy depends on. All of this leaves an ecological and economic disaster for our children. We are living wholly on a diet of chocolate. And it’s making us, our children, our economy and our planet sick.

Click to enlarge.

Research is the key

Recognising these motivations and differences would surely be sensible in any well-researched article on the subject. There are 137 funds with intelligent and articulate managers to interview; there are nearly 60 specialist financial advisers who have thousands of clients; a handful of open and honest industry bodies with tonnes of statistics and 750,000 investors who invest in this way.

Those nice people at Bridges Venture published an excellent diagram in a recent report that illustrates the continuum from traditional investment, based on securing competitive returns, all the way through to philanthropy, based on little or no financial return.

Explaining investment types (Click to enlarge).

Commentators who focus solely on profit are missing the point entirely

Ending every article about ethical investment with dire warnings about ‘strangling returns’ and ‘sluggish performance’ misses the whole point.

Focusing on returns, performance and profit ignores the more balanced, some would say more sustainable, consideration of planet, people and profit that ethical investors choose to make.

Some investors hold religious beliefs which forbid certain investments, and it is probably not wise to attack people’s faith so casually; especially when the outcome of those beliefs is a less harmful style of investment.

Some investors have strong moral convictions and would feel uncomfortable investing in something that they profoundly disagree with. We can see no harm in excluding things you find morally repugnant. In fact, it would be very odd indeed to invest in things that you do think of in this light.

Others see mature mining and energy-intensive industries as poor long-term investment options. They see innovation in healthcare and clean technology as a better place for their money. Again, this is a perfectly logical response to a devil-may-care attitude to investment that has historically contributed to the “biggest ills in the modern world”.

Profit at any cost is not the only show in town

Of course, we would all make a lot more money – millions do – if we only invested in oil and gas, mining, alcohol, pornography, gambling, tobacco and weapons. But we choose to avoid these and focus on companies that are developing new jobs and industries, protecting society, the environment and their own workforces, and still returning a profit.

As long as commentators with a lot of influence and reach talk the ethical sector down in overly-brief articles, often littered with misinformation and quotes from the uninformed, it will struggle to thrive

Markets are based on confidence. Investors can be confident that in the short-term, oil, gas and mining stocks are safe bets.

Global energy and consumer demand is rising and supply is becoming harder to maintain. Our current economic model relies on oil, gas and minerals.

As long as tobacco companies find new territories to sell cancer sticks, with no public health programmes, they too will be highly profitable.

Demand for porn, gambling and alcohol is pretty resilient, despite the enormous human cost and cost to public health systems. Humans being humans, we’ll keep fighting wars.

Yes, all these options maximise your profit. But, the future that investing in these stocks creates is disastrous for the long-term.

We shouldn’t forget that governments around the world are tinkering with tax breaks in renewable energy, in particular, making it hard for investors who favour clean and limitless energy to gain regulatory certainty.

There’s nothing arbitrary about National Ethical Investment Week; it’s a chance to explore the issues with a little depth, in the same vein as Fairtrade Fortnight and Move Your Money month.

As long as commentators with a lot of influence and reach talk the ethical sector down in overly-brief articles, often littered with misinformation and quotes from the uninformed, it will struggle to thrive.

But the long-term prospects are bright for ethical investment. Worldwide, the sector enjoys strong in-flows of funds, especially from high net-worth investors. It will also become an increasingly necessary style of investment, as Hyde rightly acknowledges, Economies in Asia and around the world may well have to turn to alternative energy if oil, gas and other fossil fuels start to run dry.” But stocks cannot thrive when confidence is weak.

Of over 3,000 funds available, only 137 fit into the ‘ethical’, ‘responsible’ to ‘impact-first’ category.

We genuinely wish that the financial press would focus their quality writers, significant influence and huge reach on investigating the massive and real harm the majority of funds are doing to our environment, society and economy, rather than sniping at those that aspire to do some good.

National Ethical Investment Week runs until Saturday, October 20. Join the movement on Twitter using the hashtag #NEIW12.

If you would like to know more about the sector and receive copies of our most recent reports, you can sign up to our weekly newsletter here.

Further reading:

Ethical investors are not tree huggers, but air breathers (and responsible global citizens)

Are we investing in the future we want for our children and grandchildren?

Ethical investment demand rises as individuals turn to sustainability

Talk of high returns amongst ethical investors detracts from the point

£11 billion invested ethically in the UK: infographic analysis

Simon Leadbetter is the founder and publisher of Blue & Green Tomorrow. He has held senior roles at Northcliffe, The Daily Telegraph, Santander, Barclaycard, AXA, Prudential and Fidelity. In 2004, he founded a marketing agency that worked amongst others with The Guardian, Vodafone, E.On and Liverpool Victoria. He sold this agency in 2006 and as Chief Marketing Officer for two VC-backed start-ups launched the online platform Cleantech Intelligence (which underpinned the The Guardian’s Cleantech 100) and StrategyEye Cleantech. Most recently, he was Marketing Director of Emap, the UK’s largest B2B publisher, and the founder of Blue & Green Communications Limited.

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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