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What is an ethical bond?

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Earlier this week, we asked, “What is a bond?”. Bond investment is a very complex area of financial services; Julian Parrott, chair of the Ethical Investment Association and partner at Ethical Futures, explains from an adviser’s point of view and delves into ethical considerations.

A bond is a much misunderstood word in the financial world and in its simplest form is used to describe a one-off single premium investment—hence, fixed rate bonds, guaranteed growth bonds, investment bonds and redemption bonds.

For our purposes, we understand the word ‘bond’ to refer mainly to the ‘fixed interest’ asset class that would encompass government stock, supra-national bonds and corporate bonds, which are basically loan notes to businesses and organisations for a fixed period of time.

Essentially, all these investments offer a fixed regular ‘interest’ or ‘coupon’ for the duration of the fixed term issue and the return potential of your full initial capital on maturity.

These are generally, though not always, deemed to be lower risk than equities (stocks and shares) in that the holder usually ranks above ordinary and other equity shareholders in the event of the failure of the business or institution. Additionally, bonds, though tradable, do not tend to experience as much volatility as stocks and shares.

The risk is associated to interest rate movements in the general market throughout the issuance period and the credit rating of the issuer.

From an ethical perspective there are a number of issues to consider:

Does government stock constitute an ethical investment?

In the UK, unlike in many European countries, it is not possible to discern between ‘good’ (e.g., health and education) and bad (e.g., arms and covert intelligence) spending.

Rather, all government spending is funded via taxation and borrowing in the form of National Savings and Investment (NS&I) issues and UK Treasury stock (gilts). We leave it up to clients to consider this option and advise us.

Most screened corporate and strategic bond funds exclude government stock, but a few don’t.

What types of bonds do you invest in?

A primarily negative screen is applied to the selection of issuers. Bond holders do not really have the ability to influence businesses through shareholder engagement, so the only real positive criteria applied are in terms of the activity of the issue or purpose of the loan.

Bond selection

The degree of ethical interest and the associated risk will affect the bond selection process.

Holdings of interest might include social landlord issuers such as the Peabody Trust, the Co-operative Bank, building societies such as Nationwide, and KfW Bankengruppe, a German issuer that has a special responsibility for the sustainable improvement of economic, social and ecological living conditions.

Perhaps in years to come we will be able to invest in UK Green Investment Bank bonds.

Risk is an issue

There are seven UK listed corporate bond funds, and they have quite different selection criteria and approaches to investment risk. Some much more geared towards A & AA (low risk) rated issuers, others willing to go into riskier BB & C and unclassified ratings.

As with equity funds, it tends to be that stricter ethical criteria will move you towards small and medium sized issuers and therefore a higher default and risk rating.

The development of this market is seen as a valuable addition to the screened investment sector, particularly in terms of offering greater choice to income seeking investors.

Further reading:

What is a bond?

Ethical investment: money with a voice

The Guide to Sustainable Investment

Julian Parrott is a founding partner of Ethical Futures, ethical specialist independent financial advisers (IFA) based in Edinburgh.

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What Kitchen Suits Your Style? Modern, Classic or Shaker?

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shaker kitchen designs

A kitchen is the centre of the home. Your kitchen ranges between where friends and family gather, talk about their day, cook meals, have drinks, to somewhere you can just enjoy each other’s company. The kitchen is the heart of the home. But, everyone’s lifestyle is different. Everyone’s taste is different. So, you need a kitchen that not only mirrors your lifestyle but matches your taste too. Whilst some prefer a more traditional design, others want a modern feel or flair – and it’s all down to personal taste.

When it comes to redesigning your kitchen, what style would you go for? It’s a difficult one isn’t it. With so many different styles to go for, how can you know exactly what you want until you’ve seen it in action? Leading kitchen designer, Roman Kitchens, based in Essex, have provided three examples of bespoke kitchens and styles they specialise in, accompanied with beautiful images. This design guide will get you one step closer to picking your dream kitchen for your home.

1. Modern

New home in the city centre? Or even a sleek new modern build? You want a trendy and modern kitchen to reflect your city lifestyle. In modern kitchen design, colours are bolder and fresher, with sleek design and utilities that are distinctive and vibrant.

modern kitchen designs

This modern kitchen is sleek and smooth with flawless design and beauty. Minimalism doesn’t stop this kitchen standing out. Featured walls of wood and vibrant mint green draw the eye, whilst the white surfaces reflect the light, illuminating every nook and cranny of this kitchen. This kitchen features products from Rotpunkt, innovators of modern kitchen design. Made with German engineering, a Rotpunkt Kitchen is the ultimate modern addition to your home. Rotpunkt Kitchens have timeless design and amazing functionality, they work for every purpose and are eco-friendly. Sourced from natural materials, a Rotpunkt kitchen uses 37% less timber, conserving natural forests and being more environmentally conscious.

2. Classic

Prefer a homely and traditional feel? Classic kitchens are warm, welcoming and filled with wood. Wood flooring, wood fixtures, wood furniture – you name it! You can bring a rustic feel to your urban home with a classic kitchen. Subtle colours and beautiful finishes, Classic kitchens are for taking it back to the basics with a definitive look and feel.

classic kitchen designs

With stated handles for cupboards, Classic kitchens are effortlessly timeless. They convey an elegant but relaxing nature. Giving off countryside vibes, natural elements convey a British countryside feel. The wood featured in a classic kitchen can range between oaks and walnut, creating a warmth and original feel to your home. Soft English heritage colours add a certain mood to your home, softening the light making it cosier.

3. Shaker

Any kitchen planner will tell you that the meeting point between traditional and modern design, is a Shaker kitchen. They have a distinctive style and innovative feel. Shakers are fresh, mixing different colour tones with stylish wood and vinyl. The most important feature of a Shaker kitchen is functionality – every feature needs to serve a purpose in the kitchen. Paired with stylish and unique furniture, a Shaker kitchen is an ideal addition to any home.

shaker kitchen designs

The ultimate marriage between Classic and Modern kitchens, this Shaker kitchen has deep colour tones with copper emphasis features. All the fittings and fixtures blur the line of modern and tradition, with a Classic look but modern colour vibe. Unique furniture and design make Shaker Kitchens perfect for the middle ground in kitchen design. Minimal but beautifully dressed. Traditional but bold and modern at the same time. Storage solutions are part of the functionality of Shaker kitchens, but don’t detour from conveying yours as a luxury kitchen.

Whatever you choose for your new kitchen, be it Modern, Classic or Shaker – pick whatever suits you. Taste is, and always will be, subjective – it’s down to you.

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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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