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Welcome to Ethical Investments
Pollution - an example of negative screening
Sustainable Forestry - an example of positive screening
Engagement - its good to talk!
Ethical Investment (or Socially Responsible Investment) is the incorporation of social, ethical and/or environmental factors into the process of selecting, retaining and realising investments.
There are three main strategies:
- Negative Screening - excluding companies from a portfolio, which do not meet the fund’s criteria.
- Positive Screening - actively seeking out companies with positive social / environmental characteristics.
- Engagement - lobbying companies on social / environmental issues in order to encourage improvement in corporate behaviour.
Although there are no universally accepted criteria or thresholds of acceptance, common negative screens are, amongst others; Tobacco, Alcohol, Gambling, Armaments/Military Involvement, Environmental Damage, Animal Testing, Genetic Modification, Human Rights Abuses.
Positive screening may range from a best in class policy (selecting companies, which are the most socially responsible in their peer group or sector) to specialist funds, for example with a focus on clean technology or health care.
The variety and quality of ethical screening varies hugely from fund to fund, as does the interpretation of screening policy by fund managers.
The quality and effectiveness of an investment company’s engagement policy depends on its level of commitment and the resources available - a major multi national could and should have a more effective engagement policy than a small specialist fund provider.
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Upcoming Events
20th February, Kenwood Hall Hotel, Sheffield
Tithe Knot Luncheon Club; 12.30 - 1.45
This is the inaugural gathering of our luncheon club. Membership is open to those who are able to certify themselves as a “sophisticated investor” and are willing to incorporate socially responsible investments as part of their portfolio.
Posted: 17-January-2008