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Economy

One day soon, we hope all investment will be sustainable, responsible and ethical – before it is too late

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Whatever you call it – sustainable investment, responsible investment or ethical investment – the challenge for 2014 is not how to make niche funds mainstream, but how to make mainstream funds sustainable, responsible and ethical.

Financial trade outstrips all other trade 26:1. More than any other human activity, what we invest in shapes the world we live in. Financial centres determine the price of everything from your morning coffee to what you need to have accumulated in assets to afford a comfortable retirement. Supposedly sovereign countries are all provincial regions of the United States of Capital.

A significant portion of financial trade does not even have human oversight, as high speed trading attempts to gain advantage faster than we can conceivably compute. The effect on individuals, communities, countries and the environment have no influence on, or stake in, this automated trading. Profit maximisation is the only priority.

Specialist sustainable and ethical funds do a lot of the heavy lifting in providing capital for ventures addressing global issues – of between £9-22 billion depending on how you define the market. That’s between 1.2% and 2.9% of funds under management in the UK (£763 billion). To effect the required change globally we need between 10% and 30% to be invested sustainably. That’s £76-229 billion. It feels like an impossible goal.

Companies that are providing clean energy, clean water, clean industry alongside sustainable, resource-light supply chains, agriculture, forestry and fishing need investment. Social investment domestically and impact investment overseas can lift communities from depending on aid or charity to be self-sustaining. They all need investment, over charity.

This means building the hard-nosed economic case for sustainable investment for institutional investors. It means encouraging pension funds and sovereign wealth funds to commit to investment that is in the long-term interest of their pension contributors and citizens. And that includes the interests of society as a whole and the environment, as well as simply profit.

It means breaking down adviser and other intermediary resistance to discussing the sector and dispelling pervasive myths about fund performance and investor disinterest. It means reassuring private investors that sustainable investment doesn’t carry more risk, but significantly less. Climate change, overpopulation, resource scarcity and unfettered pollution are real and threaten all of us, regardless of wealth, age, gender or nationality. Arbitrary lines drawn on a map are no protection against global issues.

It means creating a regulatory environment nationally and globally that makes sustainable investment strategies the rule, rather than the exception. It means making the principles, processes and best-of-breed guidance of sector bodies such as the UN-backed Principles for Responsible Investment (PRI), the European Sustainable Investment Forum (Eurosif) and the UK Sustainable Investment and Finance Association (UKSIF) standard industry practice and adhered to. Naming and shaming those who transgress might be uncomfortable for some, but these standards cannot simply be a tick-box, public relations or greenwash exercise.

Transparency on investment strategies, all holdings, portfolio turnover, company engagement and charging structures will help clear up the opaqueness of the industry and increase investor trust. No one is perfect, but functioning markets need more equality of power between investors and investees so they can make informed choices.

The accumulation of wealth for wealth’s sake is shallow and meaningless. You cannot spend it when you are dead, and there can be nothing more shortsighted, unethical and selfish as investing in a way that reduces the life chances of future generations.

Measuring success solely on a financial scale recognises everything except that which really matters. We need investment that means prosperity for the many, not just for the few. We need investment that means we pass on a viable environment to future generations rather than degrade it. We need investment that protects and values humans, rather than exploits them.

This is not some romantic, idealistic view of what the future can be, but the commonly held view that we should be capitalism’s master, not its slave – or worse, its apologist or devotee. It has done more than any other economic system yet tested to create prosperity, but the cost has been far too high so far.

We hope that one day soon, all investment is sustainable, responsible and ethical. Unsustainable, irresponsible and unethical investment is humanity’s long defeat; its suicide note for future generations.

Join other enlightened investors and build a blue and green tomorrow, and walk away from the cold and timid souls who only ever see the virtues of wealth creation at any cost.

Further reading:

From ethics to sustainability: shifting the investment debate for 2014

The sustainable investment tipping point is now

‘There are no moral or ethical considerations when investing’

Ethical investment: better a diamond with a flaw, than a pebble without

The Guide to Sustainable Investment 2013

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.

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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Economy

Report: Green, Ethical and Socially Responsible Finance

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“The level of influence that ethical considerations have over consumer selection of financial services products and services is minimal, however, this is beginning to change. Younger consumers are more willing to pay extra for products provided by socially responsible companies.” Jessica Morley, Mintel’s Financial Services Analyst.

Consumer awareness of the impact consumerism has on society and the planet is increasing. In addition, the link between doing good and feeling good has never been clearer. Just 19% of people claim to not participate in any socially responsible activities.

As a result, the level of attention that people pay to the green and ethical claims made by products and providers is also increasing, meaning that such considerations play a greater role in the purchasing decision making process.

However, this is less true in the context of financial services, where people are much more concerned about the performance of a product rather than green and ethical factors. This is not to say, however, that they are not interested in the behaviour of financial service providers or in gaining more information about how firms behave responsibly.

This report focuses on why these consumer attitudes towards financial services providers exist and how they are changing. This includes examination of the wider economy and the current structure of the financial services sector.

Mintel’s exclusive consumer research looks at consumer participation in socially responsible activities, trust in the behaviour of financial services companies and attitudes towards green, ethical and socially responsible financial services products and providers. The report also considers consumer attitudes towards the social responsibilities of financial services firms and the green, ethical and socially responsible nature of new entrants.

There are some elements missing from this report, such as conducting socially responsible finance with OTC trading. We will cover these other topics in more detail in the future. You can research about Ameritrade if you want to know more ..

By this report today: call: 0203 416 4502 | email: iainooson[at]mintel.com

Report contents:

OVERVIEW
What you need to know
Report definition
EXECUTIVE SUMMARY
The market
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
The consumer
For financial products, performance is more important than principle
Competition from technology companies
Financial services firms perceived to be some of the least socially responsible
Repaying the social debt
Consumer trust is built on evidence
What we think
ISSUES AND INSIGHTS
Creating a more inclusive economy
The facts
The implications
Payments innovation helps fundraising go digital
The facts
The implications
The social debt of the financial crisis
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
PUTTING FINANCIAL SERVICES IN AN ETHICAL CONTEXT
An ethical economy
An ethical financial sector
Ethical financial services providers
GREEN, ETHICAL AND SOCIALLY RESPONSIBLE ISSUES IN FINANCIAL SERVICES
The role of investing
Divestment
The change potential of pensions
The role of trust
Greater transparency informs decisions
Learning from past mistakes
The role of innovation
Payments innovation: Improving financial inclusion
Competition from new entrants
The power of new money
The role of the consumer
Consumers empowered to make a change
Aligning products with self
THE CONSUMER – WHAT YOU NEED TO KNOW
For financial products, performance is more important than ethics
Financial services firms perceived to be some of the least socially responsible
Competition from technology companies
Repaying the social debt
Consumer trust is built on evidence
Overall trust levels are high
THE ETHICAL CONSUMER – SOCIALLY RESPONSIBLE ACTIVITIES
Payments innovation can boost charitable donations
Consumer engagement in socially responsible activities is high
Healthier finances make it easier to go green
SOCIALLY RESPONSIBLE COMPANIES
37% unable to identify socially responsible companies
Building societies seen to be more responsible than banks….
….whilst short-term loan companies are at the bottom of the pile
CONSUMER TRUST IN THE BEHAVIOUR OF FINANCIAL SERVICES COMPANIES
Overall trust levels are high
Tax avoidance remains a major concern
The divestment movement
Nationwide significantly more trusted
Trust levels remain high
CONSUMER ATTITUDES TOWARDS GREEN AND ETHICAL FINANCIAL PRODUCTS
For financial products, performance is more important than principle
Socially conscious consumers are more concerned
CONSUMER ATTITUDES TOWARDS TRANSPARENCY
Strategy reports provide little insight for consumers
Lack of clarity regarding corporate culture causes concern
Consumers want more information
THE ROLE OF FINANCIAL SERVICES FIRMS IN SOCIETY
The social debt of the financial crisis
THE SOCIAL RESPONSIBILITIES OF FINANCIAL SERVICES FIRMS
For consumers, financial services firms play larger economic role
Promoting financial responsibility
CHALLENGER COMPANIES AND SOCIAL RESPONSIBILITY
Consumer trust is built on evidence
The alternative opportunity
The target customer

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