Ethical investments on a different planet
All consciences and financial ambitions are catered for as the funds grow and grow. By Paula Hawkins
Sunday 04 November 2007
Ethical investing used to be a simple business. A decade ago, there were just a handful of funds to choose from, and two basic varieties: light and dark green. The first of these categories was stricter, excluding all companies involved in tobacco, the arms trade, gambling, fur and pornography, as well as any firms abusing workers' rights. Light green funds, meanwhile, tended to screen companies positively, including those with a good social, environmental or ethical track record.
But the "green" universe has become much larger, more popular and a great deal more complex. There are now around 100 ethical investment funds in the UK worth a total of £5.6bn – an increase of 32 per cent in the past year alone, with growth driven by investment returns as well as the burgeoning interest in green issues. Over one and three years, ethical funds have outperformed non-ethical ones, and over 10 years the sector has beaten the FTSE 100 hands down, returning just under 98 per cent compared with the blue-chip index's 43 per cent.
As the sector has grown, it has become less easy to divide funds along simple dark and light green lines. "There is now a far greater diversity," says Philippa Gee at financial advice firm Torquil Clark. Many fund managers now combine the traditional screening approach – whereby firms are excluded or included because of their involvement in given activities – with other strategies. Some adopt a "best in class" approach: they will invest in oil stocks but seek out those companies that are trying to limit the environmental impact of their activities. Others practise "engagement" – encouraging firms to clean up their act.
The policy of fund managers such as Henderson Global Investors, which runs socially responsible investment (SRI) funds, is becoming more common. "First, we seek out the best global groups for providing solutions to climate change," says George Latham at Henderson. Examples include Solar World, a producer of solar-power technology, and Tanfield, a UK company that makes zero-emission vehicles for commercial use. "We also incorporate climate change into our assessment of companies from across the wider UK market," adds Mr Latham. He cites HSBC, a "carbon- neutral bank", and Scottish & Southern Energy, the UK's biggest generator of renewable energy.
HSBC has also been approved as a company for potential investment by the Stewardship funds, the oldest ethical range in the UK, whose approach is traditionally dark green. Tony Stoller helps set the ethical criteria for the funds and says banking has changed: "In recent years, and in large part due to the growing influence of sustainable investment, many leading banks have come to integrate this into their core lending practices."
While F&C Stewardship Income is the fund of choice for ethical investors looking to draw an income from their portfolio, those looking for investment growth could consider Jupiter Ecology. The screening process is rigorous, with initial research being undertaken by a group of environmental and social scientists, and the final selection being made by fund manager Charlie Thomas. "The SRI team is experienced, the process is strong and Charlie Thomas comes across as a passionate green manager," says Graham Frost at financial adviser Bestinvest.
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
Fraudsters are bombarding older people with dangerous pension scams: here we reveal the warning signs
China stock collapse: Five things you need to know about 'Black Monday'
Bargain Hunter: Exclusive discount on a SmartGlider - a self-balancing electric scooter
Questions of Cash: 'Our dividends seem to have disappeared when TSB was bought and then born again'
My Tinder date asked for a refund when I declined a second meet up
- 1 If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
- 2 David De Gea: Manchester United goalkeeper's £29m move to Real Madrid off - because paperwork 'not done in time'
- 3 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
- 4 Pansexual: What is it - and when did the term gain popularity?
- 5 New Apple TV release date and price: streaming box and games console will launch in October
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
UN investigating British Government over human rights abuses caused by IDS welfare reforms
iJobs Money & Business
£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...
£15000 - £20000 per annum: Recruitment Genius: An experienced Repayments Advis...
£25000 - £30000 per annum: Recruitment Genius: This leading provider of financ...
£20000 - £25000 per annum + competitive: SThree: Are you looking to take your ...
Day In a Page
In the heart of the coastal village of Mumbles and moments from the pier, this five-bedroom Victorian terrace is set over three floors and retains many original features.
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.