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Sustainable investment funds in focus: Ecclesiastical Amity UK

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This week’s featured fund is the Ecclesiastical Amity UK fund.

Managed by sustainable investment pioneer Sue Round, director of group investments at Ecclesiastical, it is one of the longest established sustainable funds in the UK. The award-winning investment firm tells us more.

Tell us about what makes your fund unique

The Amity UK fund launched in 1988 and was one of the first ethical OEICs in the UK. Sue Round has managed the fund since its launch. The fund is particularly unique as it is based on a broad and deep ethical approach featuring negative and positive screens. It aims to achieve long-term capital appreciation, alongside a reasonable level of income by investing primarily in UK companies.

How do you select which companies to invest in? 

Companies are screened against both positive and negative criteria before an investment is made. The fund seeks companies that have a strong business model, are market leaders and show good management. It also selects companies with a solid financial background, including a robust business sheet, strong cash flow generation and a focus on delivering long-term sustainable returns to its shareholders. Primarily, the Amity UK fund has a bias towards mid and small-cap companies.

Are there any companies you’d pick out as star performers or particularly interesting? 

Halma, a health and safety sensor technology group, is a particularly interesting company because it scores positively across seven of Ecclesiastical Investment Management’s nine ethical screening criteria (particularly healthcare and environmental performance & management) and it has retained record profit growth through the economic cycle with return on sales averaging 16% for 25 years+.

Oxford Instruments, a producer of instrumentation equipment used in scientific research, chemical analysis, semi-conductor processing and diagnostic imaging is also a star performer. As is Porvair, a specialist filtration and environmental technology group. These three firms are good examples of companies where the ethical positives and the investment proposition go hand-in-hand.

Why would the fund be attractive to sustainable investors? 

The Amity UK fund is a retail investment fund with a difference. Not only does it seek to deliver profit over the medium to long-term, but it does so with principles by investing in socially responsible enterprises. This is the Ecclesiastical Investment Management ‘profit with principles’ approach. In particular, it looks to avoid investment in certain areas, such as companies which have material involvement in alcohol, tobacco and weapon production, gambling and publication of violent of explicit materials, which can be a key consideration for the sustainable investor.

The robust investment process is backed up by an award-winning socially responsible investment team, including fund manager Sue Round, who has been recognised by Trustnet as one of its Alpha Fund Managers 2014 and is AAA* rated by Citywire (as of 31/01/14). The fund was one of the UK’s first socially responsible investment (SRI) retail funds and has been managed by Sue for 26 years since it was launched in 1988. It is now an established SRI Fund.

How would you respond to claims that sustainable investment funds underperform?

Performance and sustainability are not mutually exclusive. In fact, sustainable funds have won numerous awards against so called mainstream funds. Additionally, research by Moneyfacts.co.uk in August 2013 found that ethical funds posted average gains of 36% over three years, compared with 31% growth from the average non-ethical fund. This demonstrates that it is possible to have a sustainable framework and achieve strong performance simultaneously. Ecclesiastical Investment Management believes that companies which manage financial and non-financial risk holistically will be better long-term performers.

From a personal perspective, why should people consider sustainable investment more generally?

More than 100 UK ethical and responsible products now provide a rich diversity of investment for the retail client. Investing with a profits for principles approach is becoming a mainstream choice for many investors and the choice of products has never been broader. A survey by YouGov in 2012 found that 45% of UK adults with investments said that they now want at least some of their investments to take green and ethical considerations into account.

Furthermore, Ecclesiastical Investment Management believes that stock selection based upon financial and non-financial drivers will drive better risk management and better performance over time. There is no intrinsic reason why performance needs to be sacrificed in order to invest responsibly.

Key facts

Type: OEIC
Fund size: £123.2m as of February 28 2014
Launch date: March 1 1988

An online summary of the fund can be found here. 

Further reading:

Ecclesiastical, Aberdeen and Kames top fund choices for specialist ethical financial advisers

Friends Provident, Ecclesiastical and Aberdeen top ethical choices for advisers

Sustainable company of the week: Halma

2013 sustainable fund manager of the year: Ecclesiastical Investment Management

Ecclesiastical scoops ethical investment gong for fifth consecutive year

Economy

Will Self-Driving Cars Be Better for the Environment?

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self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo | https://www.shutterstock.com/g/zapp2photo

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.

Deadheading

Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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Environment

Road Trip! How to Choose the Greenest Vehicle for Your Growing Family

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Greenest Vehicle
Licensed Image by Shutterstock - By Mascha Tace -- https://www.shutterstock.com/g/maschatace

When you have a growing family, it often feels like you’re in this weird bubble that exists outside of mainstream society. Whereas everyone else seemingly has stability, your family dynamic is continuously in flux. Having said that, is it even possible to buy an eco-friendly vehicle that’s also practical?

What to Look for in a Green, Family-Friendly Vehicle?

As a single person or young couple without kids, it’s pretty easy to buy a green vehicle. Almost every leading car brand has eco-friendly options these days and you can pick from any number of options. The only problem is that most of these models don’t work if you have kids.

Whether it’s a Prius or Smart car, most green vehicles are impractical for large families. You need to look for options that are spacious, reliable, and comfortable – both for passengers and the driver.

5 Good Options

As you do your research and look for different opportunities, it’s good to have an open mind. Here are some of the greenest options for growing families:

1. 2014 Chrysler Town and Country

Vans are not only popular for the room and comfort they offer growing families, but they’re also becoming known for their fuel efficiency. For example, the 2014 Chrysler Town and Country – which was one of CarMax’s most popular minivans of 2017 – has Flex Fuel compatibility and front wheel drive. With standard features like these, you can’t do much better at this price point.

2. 2017 Chrysler Pacifica

If you’re looking for a newer van and are willing to spend a bit more, you can go with Chrysler’s other model, the Pacifica. One of the coolest features of the 2017 model is the hybrid drivetrain. It allows you to go up to 30 miles on electric, before the vehicle automatically switches over to the V6 gasoline engine. For short trips and errands, there’s nothing more eco-friendly in the minivan category.

3. 2018 Volkswagen Atlas

Who says you have to buy a minivan when you have a family? Sure, the sliding doors are nice, but there are plenty of other options that are both green and spacious. The new Volkswagen Atlas is a great choice. It’s one of the most fuel-efficient third-row vehicles on the market. The four-cylinder model gets an estimated 26 mpg highway.

4. 2015 Hyundai Sonata Hybrid

While a minivan or SUV is ideal – and necessary if you have more than two kids – you can get away with a roomy sedan when you still have a small family. And while there are plenty of eco-friendly options in this category, the 2015 Hyundai Sonata Hybrid is arguably the biggest bang for your buck. It gets 38 mpg on the highway and is incredibly affordable.

5. 2017 Land Rover Range Rover Sport Diesel

If money isn’t an object and you’re able to spend any amount to get a good vehicle that’s both comfortable and eco-friendly, the 2017 Land Rover Range Rover Sport Diesel is your car. Not only does it get 28 mpg highway, but it can also be equipped with a third row of seats and a diesel engine. And did we mention that this car looks sleek?

Putting it All Together

You have a variety of options. Whether you want something new or used, would prefer an SUV or minivan, or want something cheap or luxurious, there are plenty of choices on the market. The key is to do your research, remain patient, and take your time. Don’t get too married to a particular transaction, or you’ll lose your leverage.

You’ll know when the right deal comes along, and you can make a smart choice that’s functional, cost-effective, and eco-friendly.

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