It’s a positive day for investors and the Earth’s climate when green energy supersedes the returns of several other assets.
Fortunately for planet Earth, investors now won’t have to choose between putting their green foot forward and the growth of their finances.
This weekend marks the end of Good Money Week, an annual period dedicated to raising awareness of sustainable, responsible and ethical finance – including banking, pension savings and investments – therefore assisting people in making good money choices.
During this time, the spotlight has been on ethical investments, highlighting the benefits, revenues and what can be achieved within the ethical investment sector.
The Investment Association previously stated that the ethical investment revolution has been off to a slow start, and the sector is currently at less than 2 per cent of total funds in the UK.
Out of 26,000 financial investors operating in the UK, only 80 are registered to the Ethical Investment Association (EIA). John Ditchfield, head of the EIA, has blamed the financial services industry for the green sector´s lack of interest. He said:
“It feels like people who are in the financial services industry aren’t terribly interested in the environment.”
Market analysts, Good With Money, recently produced a study that proved the high-success rate of sustainable investments. The research, based on data from August this year, monitored ethical investment funds against those without a sustainable strategy.
The study showed that 11 out of 16 UK-focused ethical funds outperformed the average return delivered by funds investing in the British stock market.
Over the last five years, the average UK fund increased by 37 per cent, whereas ethical funds have soared by 47 per cent. During the same time, the FTSE All-Share Index rose by 18 per cent.
During the course of one year, the average UK fund dropped by 1 per cent, while simultaneously, ethical funds were up by 3 per cent.
Investment platform, Interactive Investor, has decided to improve the information available to investors who are interested in the ethical sector by creating its own classifications to funds that claim to be green.
Interactive Investor’s Moira O’Neill said:
“Our objective is to cater to a growing number of investors seeking to invest for good by providing a menu of high-quality ethical choices.”