Ethical Investments
Making the Ethical Choice
Most ethical trusts and funds have a bias towards smaller and medium sized companies. This is because most of the very large companies, due to their history and diverse range of activities, tend to fail the screening criteria.
Ethical fund managers tend to know a great deal more about the companies they invest in than ordinary fund managers. The ethical screening process requires ethical managers to ask more questions to identify investment opportunities.
Ethical investments are often referred to by their shade of 'green'. Light green funds will generally be prepared to invest in the oil industry, pharmaceutical companies and banks, but will shun arms companies, tobacco conglomerates and research companies engaged in testing on animals. Dark green funds adopt much stricter ethical criteria and will exclude any companies that fail to meet their required standards.
Light green funds are less concerned with avoiding investments, using a positive 'best of sector' approach to portfolio selection to invest in the top 200 UK companies and similar sized ones in Europe and North America. Dark green funds inevitably exclude a large proportion of leading companies from their potential portfolio - and therefore a significant proportion of the stock market.
You may invest in a variety of unit trusts and open-ended investment companies, through life assurance funds to pension funds that rely on ethical investment criteria.
There are also ethical Individual Savings Accounts (ISAs) regular savings plans, investment trusts, investment bonds - even ethical mortgages for those wanting to borrow and, of course, not forgetting ethical credit cards made from biodegradable plastic!
EIRIS
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