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



Some commentators like to paint ethical or responsible investors as a slightly deluded, financially naïve bunch of simple folk, more fond of ‘doing good’ and hugging trees, rather than operating in the red-blooded arena of serious investors. More astute investors, they argue, ignore such silly ethical considerations and pursue profit above anything else.

It’s sad that the same criticism of naïve ‘do-gooders’ was levelled at those who argued for the abolition of slavery, extending the franchise to poor men and then women, to withdraw from the colonies and, more recently, that smoking might be just be a little bit bad for you.

Those who oppose reform and progress have successively held the view that investors should be free to maximise profit from owning slaves, employing the disenfranchised and disserving poor, oppressing women, exploiting colonies and getting doctors to promote smoking.

Vested interests and their friends in the media despise change. It upsets the balance sheet to have voices questioning existing models. Let us not forget that every freedom we enjoy today was fought for, tooth and nail, and dragged kicking and screaming from the cold dead hands of those who benefited from the status quo.

Profit shall be the whole of the law

Commentators of the type described above, let’s call them profiteers, take any criticism of their worldview very personally and often resort to personal attacks if challenged. They cannot understand why anyone could or would see the world differently. Investment is all about profit and nothing else. Nothing. To do less than profit maximisation is wrong-headed and moronic. To consider investment’s effect on societies, families, individuals and the environment is foolish.

Film buffs may be reminded of the unpleasant character in Aliens, Carter Burke, who would shaft anyone “for a goddam percentage”. Or Michael Douglas’ amoral character, Gordon “greed, for lack of a better word, is good” Gekko. Sadly, profiteers see these characters as role models, rather than the horrific archetypes they are meant to be.

If that profit-only investment philosophy holds true, then there is nothing wrong with someone selling themselves into slavery. Or selling their organs or bodies for profit. Clearly, those who subscribe to the ‘profit before anything else’ worldview draw a line somewhere between what is legitimate and what is not illegitimate investment activity. They would surely, hopefully, balk at the suggestions above.

Ethical and responsible investors simply draw the line somewhere else. Often they draw a line to reflect their moral view towards the environment, society and prosperity. To do otherwise would be hypocritical and inconsistent.

Profit matters, but people and planet matter, too

Where you draw that line is clearly up to you. You can choose to minimise the harm you do by ruling out certain companies and sectors (negative screening), or maximise the good you do by ruling in certain companies and sectors (positive screening).

You can be more purist in your approach (dark green) or less so (light green). You can deliberately hold stakes in unethical companies so you can attend annual general meetings and hold them to account as an activist shareholder.

What you will always find with ethical investors and advisers, however, is that they are more engaged in and informed about the impact of their portfolio. Profit is required but it is balanced against the impact on people and the planet.

Profiteers often like to describe the ethical investment industry as confused by terminology, as though this is just a question of semantics. The ‘muppets’ (Goldman Sachs’ term), you and me, simply can’t cope with more than one term for something.

When compared to the deliberately impenetrable jargon and doublespeak of the investment world, ethical investment terms are refreshingly clear and descriptive. Yes, there are a number of terms that describe slightly different flavours of this style of investing – socially responsible, responsible, ethical, good and, our personal favourite, sustainable.

It’s all pretty much of a muchness and we’re fairly confident that the investor population is smart enough to work it all out without too much trouble. Choosing not to be the antonym of the above helps, i.e., don’t be an antisocial, irresponsible, unethical, bad and unsustainable investor.

Profiteers argue that you should only look after yourself and maximise the return today. Silly ethical considerations such as the environment or our children’s future should be limited to charity and shopping.

More enlightened investors question the impact (another word) their investments are having. With the value of financial trades outstripping the value of real trade 26:1, it is not in the arena of charity, ethical shopping and fair trade that we will secure a more sustainable future. Enlightened investors  still want a return but not at the expense of people’s lives and the environment.

All we suggest is that you make an informed choice by asking your adviser or wealth manager which companies you are investing in.

You can then ask yourself, Is that company building the world I want for my children and grandchildren? If that company arms dictators, pollutes the air we breathe, the land and seas we take our food from and is exhausting finite resources, we humbly submit that they are probably not fit and proper recipients of your money.

It is 179 years since slavery was abolished throughout the British Empire (with a few lucrative exceptions). Today we rightly look back at investment in slavery as abhorrent to our values and culture. In another 179 years, will we look back at investment in companies that sell arms to oppressive regimes, use child labour, promote smoking in countries with no health education, pollute the environment and exhaust scarce resources as equally abhorrent?

We believe we will.

Want to learn more about investing sustainably? Have a read of our Guide to Sustainable Investment and our Guide to Sustainable Banking, and stay tuned until Friday, when we’ll be publishing a second Guide to Sustainable Investment.

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

* with apologies to Robin Williams and Barry Levinson’s Man of the Year

Further reading:

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

National Ethical Investment Week 2012 begins

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.


How Going Green Can Save A Company Money



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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5 Easy Things You Can Do to Make Your Home More Sustainable




sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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