Ten top reasons for ethical investing

YourMoney.com

More than 750,000 people in the UK already invest ethically. Here are 10 good reasons why you should be one of them. [EXPAND Read more]

  1. You can avoid the negatives. Socially Responsible Investing (SRI) can ensure that your money isn’t supporting companies which engage in activities you might disapprove of, such as animal testing, deforestation, arms manufacture, or nuclear energy
  2. You can support the positives. You can actively choose to support companies or projects which have positive social and environmental policies in place, such as renewable energy, carbon offsetting, sustainable timber, or poverty reduction
  3. You don’t have to sacrifice profits for principles. SRI typically involves investment in the few industries which have managed to remain in positive growth throughout the global recession. In many cases, ethical investments/funds have outperformed more mainstream investments
  4. You know how your money is being invested. Going down the SRI route allows you to choose exactly how your cash is being invested and what difference it’s making.
  5. It makes sense. Longer-term solutions are needed for environmental concerns such as global warming and pollution, and investments supporting these tend to hold firm in times of volatility
  6. It’s a growing trend. According to the Ethical Investment Research Service (EIRIS), the amount of money invested in Britain’s green and ethical retail funds reached a record height last year of £11.3bn, and over the last decade, the number of ethical investors has tripled, from 250,000 to three-quarters of a million
  7. There’s plenty of choice. You can choose to invest directly into companies which meet ethical criteria, invest in specific projects over the short, medium or long term, or look at ethical funds which can be growth or income generated
  8. Green issues can be winners. Global warming, an ageing population, and resource scarcity are just some of the issues the world is facing. According to UKSIF, the sustainable investment and finance association, companies which are managing environmental, social and governance issues well could be the star performers of the future
  9. You can make money and make a difference. Your investment could help to create a gradual shift towards better corporate social responsibility, and ultimately shape the future of the planet and its people
  10. You can use your SIPP. Many ethical investments and projects fall within the categories of investments permitted by HMRC (known as ‘approved investments’) for investment through SIPPs (Self-Invested Personal Pensions). This allows a greater degree of flexibility for people who want to use their private pension to invest in different asset classes. [/EXPAND]