Are your investments ethical? These days this does not just involve investments that are legitimate and appropriately taxed. Instead, so called ethical investors want to make sure that their money is only being grown in ways that are environmentally and socially sustainable.
Of course, there are varying degrees of sticking to these principles. Most blue chip companies subscribe to a standard of corporate social responsibility, although some are more responsible than others.
Is this just window dressing? Or are companies really becoming more ethical to seek more investment and custom?
Research by Moneyfacts website suggests that ethical investments may be becoming more popular, but that does not make them better performers. The website found that over five years (the timescale that is typically quoted for a medium to long term investment), ethical funds yielded 33.48%, compared with the 45.87% that other non ethical funds realised.
Results over other timescales that were examined followed similar trends. However, looking at the results alone is not necessarily a way to measure the satisfaction that ethical investors may have felt at these outcomes. After all, the ethical funds still gave a healthy return, and what price can you put on their knowledge that their money had not been used to further a business fuelled by child labour, tobacco or pornography?
Recent research from the Pension Trust has found a high demand for ethical pensions among charity workers, although it could be argued that the results are not surprising when you take into account the fact that those people already work in a sector that is supposed to be sustainable and moral-driven.
72% of the people who were asked wanted their pensions to be invested ethically, with 61% saying that they would definitely take more responsibility for investigating exactly what happened to their money after they made a pension contribution in future. It would be interesting to see what proportion of the general population take this account when choosing where to invest their money.
