Eleven reasons to invest ethically

Alex Blackburne runs through eleven, sure-fire reasons why ethical investment is unquestionably the smart and correct choice when it comes to your finances.

Ethical investment, socially responsible investment, sustainable investment – whatever you like to call it, it’s a growing sector and one in which more people are starting to realise is the clever choice.

Today – on the 11th day of the 11th month in 2011 – Blue & Green Tomorrow have come up with 11 reasons as to why you should invest ethically. We hope that just one of the 11 will sway you to make that important, responsible change.

• Your money is not funding something you think is immoral, unethical or irresponsible.

This can include such sectors such as gambling, pornography or the arms trade – companies that deal with countries with oppressive regimes. Ethical investments are determined by a screening process, so any companies which deal in unethical business won’t be considered.

• You can actively support the causes you most believe in.

Ethical investment, by definition, means that you have the option to invest in something because you believe in a cause. Having your financial assets supporting your moral, social or environmental beliefs, can bring you peace of mind and massively benefit the causes you support.

• Your reputation isn’t blemished.

Having investments with a company who, say, use child labour, would certainly not be looked at favourably by your peers – especially if other areas of your life, your work for example, are completely ethical and responsible. It is often the case that many people don’t even know the kind of organisation they’re investing in, so check your current investments carefully and make that switch today.

• Benefits from major social and environmental trends.

Government targets and global action to reduce pollution, reduce environmental degradation and improve human rights, for example, will benefit those companies who adhere to these restrictions and those who invest in them.

• Ethical investments can perform better.

It is a common myth that ethical funds have poor performance. The misconception is that because certain ‘unethical’ companies cannot be invested in, the fund has to compromise its returns. In fact, many ethical companies and the funds that back them have performance that is on par with, or even exceeds, non-ethical investments. Like with all investment decisions, choose carefully or seek independent professional advice.

• Good for the long-term future of the planet.

With ethical investment, you might have the option to invest in companies which are developing products to save the Earth from global warming. Not only is this highly beneficial to your conscience, but the fact is, you’d actually be helping to save our beautiful planet from destruction.

• They make sense.

The issues the planet faces over the next 20 years will be climate change, a rapidly ageing developed world population, massive water shortages and increasing resource scarcity.  Getting in at the early stage with companies that are tackling these problems means you’re helping build the FTSE 100 of the future, the economy and world your children will live in.

• Long-term investments.

Ethical investments are generally more suited to those looking at medium-to-long term investments, rather than those looking for short term gain. This could be highly beneficial to your finances, though.

• Investments for your children.

Ethical investments make for great savings for your children, as it’ll be them who see the bulk of the benefits. Invest ethically, and make the world a better place for them to live in, in the future.

• It’s about you, your values and the future you want to create. 

No-one is going to lecture you on how you invest your money.  After all, you’ve earned it.  The real objective of ethical investment is to match your financial needs with your personal values.  It is possible to balance both.

• Make a real difference.

This is the main, most crucial point. You can go through life driving hybrid cars, recycling and using energy-saving light-bulbs, but the real difference in terms of the future of our planet will come from the impact of our economic activity – for good or ill. Your investments shape that economy. Ethical investment is the smart and positive choice.

If you would like to know more about ethical investment, ask your financial adviser if you have one, or complete our form and we’ll connect you with a specialist ethical adviser.