Eco Friendly Investment Funds Gaining

by Darren

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Ethical investing is a subject that’s been of great interest to people for years. But one of the big problems was that “ethical” companies tended to fare much worse than their aggressive counterparts. Tobacco companies have traditionally done much better than a small company focused on the humane treatment of animals. But there are signs that ethical investing is starting to pay off for many investors.

As a result of this, many mainstream fund managers now include an element of green screening in their risk management criteria. But if reputation-sensitivity is the stick, changing consumer behaviour is the carrot. Consumers are shopping more ethically, leaving hefty revenuegenerating opportunities for companies which are willing to behave well.

Penny Shepherd, chief executive of the UK Social Investment Forum, uses the growth in fair trade coffee as an example: “A much wider range of people are interested in doing the right thing and acting responsibly, she says.

“Fair trade products were originally available only from health food stores and were for a very limited range of consumers. Now they are available in supermarkets and there has been a huge increase in growth.”

It’s safe to say that “green companies” are hitting critical mass and need to be considered in almost any investor’s long term portfolio.

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