Ethical Stocks & Shares ISAs...

Mabel45

As a total beginner, I'm also interested in ethical stocks and shares ISAs. I notice one option appeared on the comparison table, but would be interested to know where to go to to find more options (apart from Google!).

dunstonh

It isn't the ISA that is ethical. It is the investments you place in the ISA.

So, potentially, any whole of market platform can offer ethical investments.

You need to decide whether you want ethical, responsible, or ESG.

If you truly want to be ethical, then you need to decide how strong your ethics are. You will then need to apply positive, negative, and neutral filters and match the funds up that meet your filters.

Alternatively, if your ethics are not that particular and you are just tick-boxing to say you want ethical, then any off-the-shelf fund that calls itself ethical is fine. However, you probably want to research each and every ethical fund you select to make sure.

If you prefer responsible or ESG, then things are simpler. However, that's less about ethics and more about choices in respect of things like global warming or social behaviour

poseidon1

Not clear whether the OP is really committed to the concept ethical investing, as opposed to a passing whim, but they should be aware of the concept of 'Greenwashing' by certain fund houses and prevalence of this practice making it challenging to identify truly ethical funds in the OEIC universe- see article below

https://bank.green/blog/greenwashing-investments-edition/

Albermarle

Triodos are an ethical bank ( long established) that offer an ethical S&S ISA.

Stocks and Shares ISA | Ethical Investments

phlebas192

It is probably worth noting that simply investing in an "ethical" fund doesn't actually promote whatever ethics you believe in. All that it means is that the fund will not buy shares in sectors (eg weapons or fossil fuels) you do not like. But it doesn't necessarily do anything to promote peace or renewable energy (using the opposite of the two examples I gave). And if the fund only ever buys shares on the secondary market then it has minimal impact on business activities anyway.

There is an argument for investing in whatever you believe will give you the highest return and then donating part of the profits to something that will actively promote the ethical issues you wish to pursue. This will probably produce a greater net benefit to the causes you believe in.

FWIW, I dont apply any ethical considerations to what shares / funds I buy. But I do donate to causes I believe in up to the extent that gift aid eats up my relevant direct taxation.

dunstonh

It is probably worth noting that simply investing in an "ethical" fund doesn't actually promote whatever ethics you believe in. All that it means is that the fund will not buy shares in sectors (eg weapons or fossil fuels) you do not like. 

If you are doing ethical selection correctly, you should select your filters: positive, neutral, and negative across a range of areas. Each ethical fund will publish its position on each of those areas. So you can align the ethical investments with your ethical beliefs.

Of course, some people say they want to invest ethically, but only to tick the box and make themselves feel better. So some providers, particularly robo-providers, have a pre-built ethical portfolio for what they think people are after. A serious ethical investor wouldn't go near those, but a casual one might.

It's also worth noting that a typical risk warning for ethical portfolios is that historically they have underperformed conventional portfolios. So you really are putting your money where your ethics are. In which case, I believe just take it seriously and not buy a pre-built option.

MarkFromCornwall

https://forums.moneysavingexpert.com/discussion/6668422/ethical-stocks-shares-isas

You might also be interested in IFISAs (innovative finance ISAs) from Ethex or Abundance - investing in shares and bonds from businesses, councils and cooperatives involved in renewable energy and other ethical developments.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82001288#Comment_82001288

As well as the S&S ISA mentioned earlier, Triodos also has a crowdfunding site for supporting similar activities.

Of course all types of crowdfunding are risky, and the sector has a long sad history of financial issues. However at least with Triodos they seem to use their banking experience to run a detailed slide rule over any proposals. Something rather lacking in the crowdfunding/P2P sector as whole, although I can not comment directly on Abundance or Ethex.

One issue is there can be long periods between opportunities to invest coming along