A fresh start - make money and make a difference in 2010
By: Mark Robertson, EIRIS
12 Jan 2010 Tell a Friend
If you've resolved to lead a more sustainable lifestyle this year, now is the time to join the growing number of people who want their money to do more than simply produce a profit.
Ethical investment has come a long way since the UK's first ethical fund - the Friends Provident Stewardship fund - was launched a quarter of a century ago and amidst some scepticism in the City. At the time, many doubted that ethical funds would attract more than a few million pounds. But over the last decade, growing consumer interest in ethical issues has continued to drive demand and there's now over £9 billion invested ethically in the UK.
In the same way that increasing numbers of us are recycling our rubbish, choosing energy efficient appliances, buying fair trade products and switching our utilities to a green energy provider, more of us are now also considering green and ethical options as part of our financial planning.
Increasing numbers of us are as concerned about whether or not our investments fit comfortably with our environmental and social concerns as we are about securing healthy financial returns. A recent poll of UK consumers conducted by Ipsos/MORI on behalf of EIRIS found that a third of us are likely to consider ethical issues when buying a new financial product.
More recently, the credit crunch and ensuing financial crisis has focused attention on what really happens in some of the world's biggest banks and financial institutions. Many of us are still recovering from the shock of discovering how the complex web of sub-prime mortgage debt stretched across the world's banks. An event which very nearly led to a number of well-known high street banks disappearing altogether and which highlighted how a focus on short-term financial gains can lead to some very nasty consequences.
This has meant that banks which take a more long-term approach and which are transparent about who they will and won't lend to, look increasingly attractive to new investors. As a consequence, since the start of the credit crunch green and ethical banks such as Triodos, and the Co-operative have reported significant increases in the numbers of people looking for a bank that takes a more sustainable approach to lending and investing.
This all adds up to an increased level of consumer interest in responsible, green and ethical finance - and evolving expectations around how banks and financial institutions should prioritise ethical issues within their lending and investing our money.
EIRIS' public opinion survey showed that we want banks and financial institutions to prioritise protecting human rights, tackling climate change and investing in fair trade in their lending and investing activities.