Doing the bright thing

Arms manufacturing? Tobacco products? If these are not your investment bag, there are many ethical options.

Nowadays most of us invest in equities through unit or investment trusts. These come as pre-packaged, retail financial products. But there are plenty of alternatives for ethically minded investors.

Nowadays most of us invest in equities through unit or investment trusts. These come as pre-packaged, retail financial products. But there are plenty of alternatives for ethically minded investors.

According to Fleur Leach, ethical stockbroker at Capel-Cure Sharpe: "Many of my clients are looking for a bespoke service, matching their specific ethical or environmental concerns to the purchase of shares in particular companies. We offer a full, discretionary management service for unit trust portfolios, but investing into shares allows our clients to study company activities in depth and decide just which areas they wish to support or avoid."

Most of Ms Leach's clients avoid investing into areas such as arms manufacture, animal testing and the manufacture of tobacco products. But what about the production of alcohol? "Negative screening can be too restrictive, and I wonder how many of us really object to the responsible production and sale of alcoholic products," she says. "For instance, after discussion, a client might decide that while avoiding the principal manufacturers in this sector, they were prepared to invest into restaurant or hotel chains which never-theless distribute alcohol products."

With many of the ethical sector's unit trusts overweight in small to mid cap shares, buying a share portfolio also offers other attractions. "Issues around asset allocation may be eased by buying shares rather than collectives," observes Ms Leach. "An individually tailored share portfolio may hold a far higher proportion of large cap, FTSE 100 shares than you will find in most of the sector's collective funds. This can be achieved even with the use of a wide set of negative screens. On the other hand, a share portfolio can also be themed around an area of special interest like the environment."

Among small cap shares meeting favour with Ms Leach is First Technology, with a current share price of around 480p, and capitalisation of pounds 267m. The company has two main areas of interest: the development of crash-activated fuel cut-off systems for cars, and some 80 per cent of the market in crash test dummies. From the FTSE 250, Ms Leach selects shares in Halma, trading around 117p, giving the firm a capitalisation of some pounds 423m. "The whole business is focused on safety products," observes Ms Leach. "These include detection and protection products such as fire and gas detectors. This a niche with strong growth potential."

Finally, among FTSE 100 or large cap shares, Ms Leach likes retailer Tesco, with a current share price of around 184p, and capitalisation of over pounds 12.2bn. "They give a lot of encouragement to organic products and are against animal testing. Also they give good information to consumers on nutritional issues and take a clear stand on questions like GM foods."

Meanwhile, at the other end of the investment spectrum, Malcolm Lynch, a solicitor, serves as a matchmaker for private investors and business start-ups with an ethical or ecological theme. "Projects range from those with high social but poor financial returns to those which can compete in the open market against non-ethical investments. Most are either private or unlisted companies or else various types of deposit taker, ranging from ethical banks to different forms of mutual society," he explains.

Examples include the Ethical Property Company, which has already raised pounds 500,000 from a share issue this year. Managing director Jamie Hartzell explains: "We are offering the opportunity to invest into a firm which specialises in letting office space to charities and voluntary organisations." They are renovating a building in Oxford which will serve as an environmental resource centre. They are also planning to develop a site in Bristol which will become the headquarters for Women's Aid, a charity for battered women. "The voluntary sector is huge, says Mr Hatzell, "and demand for the kind of office space we provide cannot currently be met on the open market."

Elsewhere , the Wind Fund, sponsored by Triodos Bank has issued shares and raised pounds 2m for investment into the generation of electricity using wind turbines and hydro-electric power. Shares are on offer, but are not traded on the stock exchange. Triodos Bank say they will try to match anyone wishing to sell their shares with prospective buyers but warn that there is no guarantee of this happening.

Mutual societies have been formed around regional redevelopment programmes. Aston Reinvestment Trust (ART), has raised over pounds 1.4m against a target of pounds 3.5m by 2000. ART is registered as an "industrial provident society", with a board of governors chaired by Sir Adrian Cadbury. You can invest between pounds 250 and pounds 20,000 and from 2000, the society will declare a dividend payable on these accounts. Money raised is re-lent into the Aston area, providing seed-corn capital for small business start-ups.

The Industrial Common Ownership Fund (ICOF) will invest anywhere in the UK. ICOF issues ordinary shares paying a 6 per cent dividend; this money is re-lent to small businesses run as workers' co-operatives. ICOF only invest into businesses they think will succeed, such as the Altham Hardwood Centre, which supplies sustainably farmed hardwoods for the restoration of old buildings.

'The Independent' has published a free 20-page Guide To Ethical Investment, spon-sored by the David Aaron Partnership. Write to: The David Aaron Partnership, Shelton House, High Street, Woburn Sands, Milton Keynes, MK17 8SD or call 01908-281544

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Claims Administrator

    £16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

    Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

    £50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

    Recruitment Genius: Security Officer

    £16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

    Ashdown Group: Business Analyst - City, London

    £50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

    Day In a Page

    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss
    Tony Blair joins a strange and exclusive club of political leaders whose careers have been blighted by the Middle East

    Blair has joined a strange and exclusive club

    A new tomb has just gone up in the Middle East's graveyard of US and British political reputations, says Patrick Cockburn
    Election 2015: Meet the top 12 wacky candidates seeking your vote in May

    Election 2015

    Meet the top 12 wacky candidates seeking your vote in May
    Countdown to the election: Operation Save Danny Alexander shifts into high gear as the SNP target his Commons seat

    Operation Save Danny Alexander shifts into high gear

    The Chief Secretary to the Treasury didn’t forget his Highland roots in the Budget. But the SNP is after his Commons seat
    The US economy is under threat because of its neglected infrastructure

    The US is getting frayed at the edges

    Public spending on infrastructure is only half of Europe’s, and some say the nation’s very prosperity is threatened, says Rupert Cornwell
    Mad Men final episodes: Museum exhibition just part of the hoopla greeting end of 1960s-set TV hit

    New Yorkers raise a glass to Mad Men

    A museum exhibition is just part of the hoopla greeting the final run of the 1960s-set TV hit
    Land speed record: British-built hybrid rocket car aims to be the fastest on Earth

    British-built hybrid rocket car aims to be the fastest on Earth

    Bloodhound SSC will attempt to set a new standard in South Africa's Kalahari desert
    Housebuilders go back to basics by using traditional methods and materials

    Housebuilders go back to basics - throwing mud at the wall until it sticks

    Traditional materials are ticking all the construction boxes: they are cheap, green – and anyone can use them
    Daniel Brühl: 'When you have success abroad, you become a traitor. Envy is very German'

    Daniel Brühl: 'Envy is very German'

    He's got stick for his golden acting career and for his beloved restaurant - but Daniel Brühl is staying put in Berlin (where at least the grannies love him)
    How Leica transformed photography for ever: Celebrating 100 years of the famous camera

    Celebrating 100 years of Leica

    A new book reveals how this elegant, lightweight box of tricks would transform the way we saw life on the street and in fashion, on the battlefield and across the world