Invest

Positive investment market grows to £3.25 billion

Published

10 years ago

October 19, 2014

Blue & Green Tomorrow

The UK’s positive investment market has grown to £3.25 billion, with 1.75 million investors and savers directly supporting businesses that create social and environmental impact, according to a new report.

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Make Money Do Good – a report launched by the online positive investment marketplace Ethex to coincide with Good Money Week – reveals that the market has grown by a third since early 2012.

Savers make up most of the record-breaking sum, with £2.1 billion saved in credit unions and £862 million in ethical banks and building societies.

Meanwhile, £249 million has been directly invested in community share offers, charities and social enterprises, as investors increasingly look towards local projects and businesses.

Community-owned renewable energy schemes have proved the most popular investment, with 56 projects raising £29 million. Social property and regeneration projects raked in £2.5 million while £1.4 million has been invested in food and farming initiatives.

The popularity of positive bonds has also soared, with seven charities and two companies raising £49 million since early 2012, up from just £12 million before.

“A growing number of people are taking control of their money and making it do good, choosing to save and invest directly in businesses that deliver not only a financial return but also demonstrable benefit to society,” said Ethex founder Jamie Hartzell.

“Positive investing is emerging as a broad and unstoppable movement, a popular response to the financial crisis. People today want a more direct and immediate relationship with financial institutions that can be trusted, and that are transparent and accountable.”

Positive investment is defined by Ethex as investment that is channelled directly into things like renewable energy, efforts to tackle poverty, and community shops, rather than simply negatively screened to avoid unwanted sectors.

It provides an alternative to conventional ethical investment, which, Hartzell said, “has been slightly co-opted and watered down by large financial and commercial businesses, and has lost meaning and no longer carries trust with the public.

“It [positive investment] is less judgemental, and it is about what you choose to do as a person, not some way you are told you ought to behave,” he told Blue & Green Tomorrow.

The report also reveals the changing profile of positive investors, noting that younger people are investing more, while individual investors are increasingly looking to build a diverse portfolio. Some 9% of the investors to use Ethex are now aged between 20-29, up from 3% in 2013.

In order to further grow the market, Ethex calls for increased investment in financial infrastructure and better consumer education of the risks and opportunities of investment.

“A movement is emerging, refreshing a spirit of co-operative action that is people-centred and from the ground up,” Ed Mayo, secretary general of Co-operatives United Kingdom, wrote in the report foreword.

“This is a movement that should be supported and encouraged, reflecting it within wider tax policy and with intelligent and proportionate regulation, that recognises the social value and consumer empowerment that positive investing can bring.

“The good news is that positive investment is emerging as a proven option for individuals and communities right across the UK. With the right infrastructural support this market has a very exciting future.”

The UK Sustainable Investment and Finance Association’s (UKSIF) annual awareness raising event Good Money Week, which launches on Sunday, will work to raise the profile of positive and sustainable investment with a series of events across the country.