GET STARTED WITH GREEN AND ETHICAL INVESTING
Green and ethical investment may help you make money, and make a difference. This page provides a quick overview for investors new to green and ethical investing.
What does it mean?
Green and ethical investments look at the wider impact of investing on society and the environment when seeking financial returns. They take into account social or environmental criteria in addition to financial criteria.
You may sometimes hear the terms 'responsible' or 'socially responsible investing' used interchangeably with 'green' and 'ethical', but they usually mean the same thing.
Options available
The terms 'green' and 'ethical' can apply to many different types of financial products and investments. Options exist for investment funds, pension schemes, savings accounts, and even mortgages.
The research advisory firm EIRIS estimates that there are around 90 green and ethical investment funds available.
Doing good
Just as you can now choose from a range of green or ethically produced goods in your local supermarket, you can also choose financial products that have positive benefits for the environment and society.
Green and ethical investments are a powerful tool that allows you to have a positive impact on the world around you. Green and ethical investments may promote greater corporate responsibility, invest in solutions to 21st-century problems, or contribute to cleaner, greener profits.
Smart choices
Investments that manage their environmental and social impact may create more sustainable profits, and could be well-placed for long-term growth.
Green and ethical investment may also help you benefit from major social and environmental trends, such as government targets to reduce carbon emissions.
Sustainable returns
Looking at the bigger picture can help your investment manager minimise risks, and can help you diversify your portfolio. There is ample evidence that a well-managed green and ethical investment can perform as well as, and in some cases, better than other investments.
Your financial adviser should be able to help you find a green or ethical option that matches your level of risk and investment strategy.
Want to learn more?
YourEthicalMoney – Independent, non-profit information on green and ethical money, including banking, pensions, and insurance and investments
Getting Started with Ethical Investing – podcast by Brigid Benson, Financial Adviser at The GAEIA Partnership.
For a basic primer on investment, check out the FSA's site Money Made Clear.
Looking for a green and ethical ISA? See our recent report Green ISAs: The NEIW Fund Supermarket Ratings to find out which fund supermarkets provide the best information on green and ethical stocks and shares ISAs.
For a more in-depth treatment, we suggest Green Money: How to save and invest ethically, by financial journalist Sarah Pennells.
