Ethical investment is one name given to a type of investing where your values help to ‘inform’ your investment decisions. Others are Sustainable Investment, Responsible Investment, SRI, ESG Investing and theres probably a few others. Lets say for the sake of this post that they are relatively interchangeable.
In short, it means that if there are corporate activities that you don’t like and don’t wish to support with your hard earned, like human rights abuses, tobacco manufacture, sweatshop labor and so on, you can avoid them. If there are activities you’d like to support, like renewable energy and medical research, you can.
So, here is a list of why Buzzfeed should write an article about them.
- The returns of ethical investments options compare favourably and regularly outperform ‘mainstream’ investments. So, ‘they don’t do very well’ isn’t an excuse.
- Fees are variable, but they are comparable with similar actively managed funds. Even so, it is the net return to investors that is important. See above.
- Investing in ethical investments allows you to be an ‘activist’ 2 hours a day, 7 days a week, without leaving your house. Advocacy plays a strong role in ethical investment.
- You can invest in line with your personally held values, meaning you can look after your financial future, while helping with everyone’s future.
- You can financially support the businesses who you support in your everyday activities.
- Customers of businesses that operate in the ‘sustainable/free trade/organic’ space are lily to be more ‘loyal’, allowing for steadier return prospects. Thats good for an investor.
- ‘Ethical’ businesses take their reputation seriously. As a result, there is less likely to be any corporate ‘surprises’ based on bad behaviour.
So to sum up, you can feel comfortable that investing ethically can reflect your values, while assisting you to secure your future. What’s not to like.
*Waits for Buzzfeed to write the story*