The UK must wise up to SRI
Socially responsible investment (SRI) allows people to align their personal beliefs regarding environmental, social and ethical concerns with their financial objectives. It’s becoming the chosen vehicle for many investors who demand more than just financial growth from their money.
However, according to recent research, 63 per cent of the UK public don’t know what an ethical investment is.
The research also highlights the widely held perception that investing ethically means having to sacrifice financial performance. While 16 per cent of British people would only ever invest for personal profits, only 30 per cent think that you can have both profits and principles when it comes to a socially responsible approach to investment.
However, there is no doubt that the market is becoming more mainstream. Over the past 18 months, there has been significant growth, in spite of the tough climate, in so-called ‘ordinary’ investors who are increasingly finding that ethical investments fit their requirements as both an investment and a way of fulfilling what they see as their social responsibilities.
People who may previously have invested in property or dabbled in the stockmarket are looking for something different, but while they are more conscious of the environmental and social impact their choices could make, they are by no means prepared to sacrifice good investment sense to buy into such products.
A combination of a natural shift in attitudes and sound investment sense has started pushing ethical investment into the spotlight.
It typically involves investment in the few industries which have managed to remain in positive growth through the global recession.
Since people have lost trust and confidence in the more traditional investment models, the returns demonstrated by ethical products combined with their social, environmental and ethical benefits make for a very compelling investment case.
It’s also clear that many investors are interested in the concept of investing ethically.
According to a recent consumer survey by Mori on behalf of Eiris, the non-profit sustainable investment research firm, 38 per cent of people with a financial product or service were interested in green or ethical financial products and services.
Of those, 90 per cent said they would be likely to switch to a different provider if it offered green or ethical investment products.
In addition, Eiris says that the amount of money invested in Britain’s green and ethical retail funds has recently reached a record height of £11.3bn.
Moreover, in the past decade, the number of ethical investors has tripled, from 250,000 to three-quarters of a million.
Ten reasons to give ethical
investment the green light
1. Avoiding the negatives. SRI can ensure that investors money is not supporting companies which engage in activities that they might disapprove of, such as animal testing, deforestation, arms manufacture or nuclear energy.