Ethical Investments

Maddie

Whilst trying not to sound too corny, I would like my life to have a positive effect on the world. I try to be enviromentally friendly and give to charity etc, but one thing I haven't done yet is ensured that my investments are ethical.

I enjoy chasing the best rates (cahoot 5.65, first direct 6.25...) and I don't like the idea of transfering to lower interest accounts, but feel that I really should. I tried to tell myself that it didn't matter as the money wasn't really mine (stoozing etc), but this is a pretty rubbish excuse and I also now have actual savings.

What are the best ways to invest ethically? Are there any savings accounts that actually give a real return (after taking off inflation)?

What are your reasons for and against choosing ethical investments? How much do you think it really matters?

Thanks,
Maddie

ReportInvestor

Hi Maddie,

I'm quite worried about you! You are obviously a good person and it's wrong if you are beating yourself up over very little.

Given the way the stock market operates, I suspect that investing ethically just creates a larger profit for those bounders who choose to invest in arms, tobacco & drinks stocks. Or perhaps in practice it makes no difference.

If companies are a good prospect you can bet your bottom dollar that pension funds - that's you, me & everyone - will invest. Income is desperately sought after.

Ethical investment article from the Mail on Sunday

"....Ethical Investment Research Services (Eiris), a green charity, recently rated Co-operative Bank the best for ethically-minded savers...."

[Warning - Be careful here. The Co-op is a mutual but the Co-op Bank is not.]

"...contact Eiris on 020 7840 5700. The charity won’t offer financial advice, but can point investors in the direction of someone who can. It publishes a list of ethical financial advisers, and a number of useful leaflets on financial issues. For around £120, Eiris will even screen a portfolio and suggest companies that match investors’ ethical criteria."

If you are worried about the ethics of chasing savings rates and credit card rates then clearly you are on the wrong bulletin board :rotfl:.

Maddie wrote:

I don't like the idea of transfering to lower interest accounts, but feel that I really should.

Why? :eek: :eek: I'm utterly gobsmacked that you should want to give overpaid directors another chance to increase their fat cat salaries. Don't think for one moment that your virtuous self sacrifice would benefit other less informed customers.

Maybe the best thing for you is to put your money in building society members' loyalty accounts (when you have qualified after 2/3 years) so that you can feel justified in having a respectable rate of interest better than the average and feel that you are supporting a mutually owned organisation that cares for its community and recycles its paper?

Better still, why not still chase the top rates [you said you enjoyed it ] and give the extra 1% to your favourite charites via tax efficient means.

cheerfulcat

Hi, Maddie,

What are your reasons for and against choosing ethical investments? How much do you think it really matters?

I took control of my investments away from fund managers and IFAs partly because I wanted to make sure that my money was not invested in companies that make armaments or test things using animals ( hard to avoid in most mainstream funds ). To me *personally* it matters a great deal that I am not making money from activities which I find unacceptable. To those companies, of course, it matters not at all, and in the wider scheme of things makes absolutely no difference. It just means that I feel comfortable with my investments.

HTH

Cheerfulcat

Maddie

Thanks for the replies.

ReportInvestor - please don't worry about me, I'm not beating myself up, just want to be well advised. Just looking at the Eiris site now.

I had considered your suggestion of staying with the normal banks and giving part of my profits to charity, it's one of my options. Perhaps if I continually swap between high introductory offer rates, the banks will actually make a loss on me, my current accounts definately make a loss on all the joining gifts they give me!

When I said that I felt that I should switch to lower interest accounts, I only meant ethical ones, sorry that wasn't clear. I see nothing ethically wrong in getting the highest savings rates and lowest credit card rates. I know some people think this means somebody else is going to get a rubbish rate, but the way I see it, the banks are going to screw those that they can, as much as they can, no matter what they offer others.

Maybe it would not make much difference if I swapped to ethical investments, but it definately would if many did. This is the same with most issues really, like it doesn't make much difference if I choose to walk to the shops instead of driving, or choose to give a few pounds to charity, so I don't feel I can use it as an excuse. Then again, you say you suspect that investing ethically just creates a larger profit for those bounders who choose to invest in arms, tobacco & drinks stocks. Could you please explain this theory?

Then there is the debate of want people think of as being unethical, for me I just want to avoid what I see as the worst. Or even just show my support for considering such issues (if that makes sense).

I had wondered whether to post this in the discussions board, but feel that this board is probably more appropriate, hope it is ok here!

Maddie

dunstonh

took control of my investments away from fund managers and IFAs partly because I wanted to make sure that my money was not invested in companies that make armaments or test things using animals ( hard to avoid in most mainstream funds ).

Im not sure I know of any IFAs that make armaments or test things on animals. Im sure some members of the public would like to test things on their IFAs though.

From my experience, the ethical investments question has been part of my factfind for many many years. Most say not bothered, some say that if it comes down to a choice of two similar, they will go ethical and only a small handful say they want ethical.

The research software I use allows for filtering of ethical funds but the biggest problem is that some providers have different definitions of what is ethical. There is the potential to have a manager investing in a way that you think isnt ethical but they do. However, the managers will have a breakdown of information on their views and goals which you should verify beforehand if it is an area that concerns you.

ReportInvestor

dunstonh wrote:

Im not sure I know of any IFAs that make armaments or test things on animals. Im sure some members of the public would like to test things on their IFAs though.

:rotfl: Nice one, dh.

Maddie. I suppose I'm thinking that the "bounders" have a chance to choose from both ethical and unethical companies. If the latter are undervalued because they are avoided by ethical investors then they could prove good long term value.

In theory market forces should ensure that I'm wrong. But if I am wrong then ethical investing doesn't put any pressure on unethical companies. Public opinion, demonstrations and consumer boycotts are likely to be more effective.

I'm glad my concerns about you proved groundless .

EdInvestor

I'm not personally too bothered about ethical investing,in that there are always so many ways to look at things and it's so often a question of where to draw the line.

For instance take Provident Financial,the finance company that lends to poor people and charges very high interest rates.

Would Moneysavers feel comfortable buying shares in this company? Personally, I have no problem with fag and booze company shares (nobody forces people to smoke or drink) but I do wonder about this company.

I get the feeling that these poor people who need money actually don't have a choice but to pay extortionate rates.Then again I've also heard that "the Provy" is seen as a real lifeline in poor communities, which would be devastated if it was forced to stop operations.

What do others think? Is this business ethical?

cheerfulcat

Im not sure I know of any IFAs that make armaments or test things on animals.

I wouldn't put it past them... But I think what I said was clear enough :-)

Seriously, one of the problems for the would-be ethical investor is that most of the "normal" funds will have money in companies which could be problematic even though they might not at first appear so ( and most IFAs will not be aware of this ). Many people wouldn't want to invest in Coca Cola or McDonald's, for example, because their environmental records are so bad.