My second Ethical Investment Conference of the year took place last week.
The Ethical Investment Association is an organisation that is growing strongly, as is investor awareness of the issues.
There are several websites giving detailed descriptions of what Ethical Investing is and what each available fund is mandated to achieve.
For that and many other reasons, I do not intend to add more information to that already and easily available.
I do want to talk about why I promote this sector.
Logic says that companies who behave in a responsible and principled way are less likely to create environmental damage, leading to loss of reputation and profit.
Ensuring their entire supply chain meet stringent standards of fair wages, good health and safety and responsible behaviour to their community, provides them with certainty, minimising risk of reputational damage, fines or compensation payments.
Companies who take care of their human capital grow and thrive. In a competitive world the best and brightest increasingly chose companies with good corporate governance.
Each of these themes mitigate towards better and sustainable profits. However it can mean the exercise of patience, rather than a quick return.
The living wage
Many of the UKs largest employers are still to sign up to the Living Wage, those who have find that they actually reduce costs, by savings on recruitment and increased productivity.
Who owns the companies?
Not the managers but the shareholders, many of which are collective investment vehicles, such as pension funds and ISAs. Ultimately, by investing in the funds, you the investor are in a strong position, by acting collectively with other fund holders.
By choosing an active fund manager, who is able and willing to challenge Board decisions, you have influence. Fund managers with a large enough holding can change corporate policy and are increasingly doing so.
Profit with principles
Making decisions based on knowledge makes sense, why then do some investors continue to invest without asking some basic questions?
It is no longer acceptable for an adviser to recommend an investment base on past performance. Remember the Banks and BP were considered safe options less than a decade ago. They could be relied on to give a good regular dividend.
Consider the world as it is today and what you want it to look like in 10 or 20 years. It won’t be governments who make a real difference, nor the Multi Nationals, they are all too slow and have too many vested interests.
Consider you values and principles and then ask the detailed questions, before you invest for yours and your families futures.
How did i become an ethical investor?
In 1988 my mother died of lung cancer, already an adviser, I set out to find an investment for her grandchildren that did not include tobacco.
Definition of madness
To keep doing the same things and expecting a different outcome!