Almost 17 million investors potentially hold assets that would not meet their personal ethical preferences, new research from the ethical bank Triodos shows.
The data, which has been released ahead of National Ethical Investment Week (NEIW), suggests investors are failing to assess the funds they hold as assets. Some 70% of investors are potentially seeing growth and returns from companies and sectors, which, when prompted, they are ethically opposed to.
In addition, fewer than one in eight are aware it’s possible to invest ethically in mainstream companies. The figure highlights a lack of awareness despite the broad range of ethical funds now available.
Despite the lack of awareness, only 17% of investors believe in investment return at all costs and saying that achieving the highest possible return is more important than being ethical.
The sustainable bank analysed companies, and its subsequent study found that more than half of the FTSE 100 companies are potentially active in unethical areas. This included 12 mining companies and seven oil and gas firms.
Within the FTSE 250 there are six arms and defence companies and seven companies involved in fracking.
“Many of us will have a pension or some stock market investment and not realise that a proportion of our portfolio may be invested in those sector we find personally distasteful”, Huw Davis, head of personal banking at Triodos Bank.
“And if we are put off by investments in certain sectors, it’s down to us all to look underneath the bonnet of our investments to ensure we are happy with how they are invested.”
When asked which activities would prevent them from investing almost three quarters of investors said human rights abuses. Pornography, arms/munitions and animal testing were also seen as unethical by a high proportion of investors.
The findings support an ongoing survey by Blue & Green Investor, which found 91% or respondents want to do good with their money whilst still getting a financial return.
The survey also revealed that historical negative screens, such as pornography, alcohol, gambling and tobacco, are now of least concern to respondents. These have been replaced with environmental issues including renewable energy, clean water and having a positive impact on people and communities.