Your Money: Put your money where your morals are

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The Independent Culture
To most of us, investing is something we do without considering the social consequences. Yet increasing numbers of people are choosing to put their money where their consciences are. Nic Cicutti profiles a new guide to ethical finances.

Almost unnoticed until recently by the big battalions of the financial services industry, a new approach to investments is gaining ground in the UK. It is called ethical investment.

This, loosely described, is an approach which starts from the premise that the way we save our money can have both positive and negative consequences on the world in which we live.

It also accepts that we want our money to work for us in exactly the same way we lead our everyday lives, based on similar moral positions and promoting similar values.

Ethical investments have come a long way since 1984, when Friends Provident, a mutual insurance company, launched its first ethical unit trust, the Stewardship Fund.

Friends Provident's premise was simple. Surveys showed that the majority of investors wanted to be able to choose funds where their money was invested ethically - that is, avoiding controversial investment areas, such as the nuclear industry, the arms trade, gambling, alcohol-related companies, and tobacco manufacturers.

Equally important, they also wanted their money to be invested according to proper ethical criteria - benefiting the environment, for instance, or into companies which make a positive contribution to society, such as manufacturing safety equipment, or which try to deal fairly with Third World partners.

For Friends Provident and more than a score of insurers that have followed suit since then, meeting that kind of customer need has become a vitally important area of business.

As more and more people have become aware of the existence of ethical investments, the value of such funds has grown from a few hundred million only five or six years ago to more than pounds 1.5bn today. This is still tiny compared to the vast level of cash pouring into non-ethical alternatives, but growth has tended to be exponential.

That is why The Independent is offering a free guide to ethical finances to its readers. The guide, written by this paper's personal finance editor, covers every aspect of ethical finances, explaining how companies arrive at both the negative and positive criteria they adopt when investing cash.

It also examines the different claims put forward by the various fund managers as to their investment strategy, whether ethical investment need be at the expense of good fund performance, which companies operate in which sector (pensions, unit trusts, investment trusts, banking, credit).

It offers suggestions on strategies to follow if you are in an occupational pension scheme and want it to adopt a more ethical approach, including how to top up your existing fund in a more ethical manner.

Finally, the guide provides a list of telephone numbers and addresses of useful organisations to contact if you want to know more. For anyone who has ever wondered whether they could do a little more with their money than just obtain a decent rate of interest on it, The Independent's guide is essential reading.

To obtain your free copy of `The Independent Guide to Ethical Finances', written by Nic Cicutti, personal finance editor and sponsored by Friends Provident, please call 0800 214487 or fill in the coupon on this page.

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