No, this is not the racy badge of a sporty Vauxhall Astra? It actually stands for Socially Responsible Investments.
For some people, making money at any cost just isn’t an option and for some time investors have been able to choose to invest their ISAs and pension monies in funds that seek to invest in companies with strong ethical or environmental beliefs.
These funds look to avoid investing in certain business activities such as animal testing, tobacco, military, or companies or countries with a poor human rights record. Ethical/environmental funds will use what’s called a negative screening process to avoid investing in these areas.
Ethical/environmental funds will also look to invest in companies that engage in positive business activities such as education and training, equal opportunities, basic necessities and new cleaner and sustainable sources of providing fuel and power. They will use a positive screening.
You can also invest in the industries of the future. By directing your money into ethical funds, you can focus money into exciting new developments in areas such as renewable energy, organic farming, healthcare and education.
In the UK, there are 1000’s of funds for an investor to invest in. There is however probably less than 100 funds that could warrant the SRI badge, and getting it right is not as easy as you think.
Take the Catholic Church for example. Regardless of your beliefs, we would hope that they would choose to invest their money ethically? You may recall that they were recently shown to have invested in Wonga Loans, who as we know may not be in the SRI class!
It is possible to profit from principles. Some companies are proving that by becoming responsible corporate citizens, they can possibly make more profits. Ethical principles can however limit your investment scope so unless you truly are committed to this style of investing, then it’s worth keeping your options open.
Come and talk to Poole Townsend to discuss your options. Call (01229) 811811 for an appointment.