Talk for the Malvern Women in Business Meeting

Why invest in Socially Responsible Funds (SRIs)? Let us start by considering why weinvest and the impact it has.

We save for our futures and those of our families.

We save for the short term in cash deposits and for the medium and long term in a range of assets, from property to stocks and shares.  Sometimes those savings/investments attract a tax benefit, for example ISAs or Pensions.

Cash savings :  normally in a bank or building society or even the post office.  Considered safe, as the original capital is returned, but the interest may not be sufficient to grow the money to keep pace with inflation.

The alternatives to cash are wide ranging and each is considered to have a particular exposure to risk.

Some of those risk are :

Buy to let properties carry the risk of:
lack of reliable tenants, damage to the building or contents, the local area becoming blighted or the economy slows (either national or local).
Property only sells quickly when the market is rising.

Bonds and Gilts:  the underlying bond or gilt is only as good as the issuer. Default is possible.

Stock markets: the price of shares is more related to sentiment than reality.  There is a particular risk if the corporate governance is not adequate.

Apart from the potential benefit/risk to you and your family, there is another important element to investing.

The institution, government, company or individuals you invest in receive the money and then they make a choice about what to do with it.  This is the part that has mostly been missed by the saver or investor.

Why do institutions, governments, companies and individuals want your money in the first place?

Institutions (banks) need your money to lend to others.  They may also use your money to “invest” in financial instruments or share portfolios.

Governments need money to pay the Civil Servants, provide support to local authorities for social services, housing and schools etc.,  pay for armaments, defence and humanitarian aid.

Businesses need finance to invest in expansion, research and development, new projects etc.

Your savings and investments keep governments and business financed.

Making Socially Responsible choices with your money ensures that the institutions, governments and businesses that your finance are not involved in bad or irresponsible activities.

To encourage and support companies who improve the lives of their employees, communities and local environment is to Make Money and Make a Difference.

Providing investment to companies who are involved in clean energy, water purification or recovery is also about Making Money and Making a Difference.

Challenging the boards of some of our biggest companies to ensure their supply chain does not exploit their workers or suppliers is also about Making Money and Making a Difference.

Every one of us has a personal Ethic, each one of us will have different ethical priorities.

Choosing an adviser who is a member of the Ethical Investment Association or even selecting your own SRI funds through  is an excellent starting point. By doing so you are encouraging better corporate behaviour, supporting the development of useful products, avoiding environmental damage (for which companies pay a high price, loose their reputation and find their share value plummet)

I am happy to take questions.

See the video:



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