To mark Good Money Week 2016, John David, head of Rathbone Greenbank Investments gives 5 reasons why ethical investment makes sense.
- Your financial objectives can be achieved while staying true to your values – companies with high ethical standards and sustainable business practices are likely to make good long-term investments.
- You can use your money to help build a better future for everyone. Ethical investment is not just about what you don’t invest in. It is also about where you do invest, for example renewable energy, healthcare, education and affordable housing.
- Investing ethically can bring about corporate change. Shareholder rights can be used to vote at annual general meetings guiding the direction of companies, for example with regard to executive pay or social and environmental reporting.
- Investment can be a powerful force for good. The inclusion in the Modern Slavery Act 2015 of the Transparency in Supply Chains initiative (requiring large companies to report on the steps they are taking to prevent modern slavery within their supply chains) came about through investor activism.
- Public scrutiny demands strong stewardship – charities need to make informed financial choices in order to ensure that their investments do not conflict with their mission.