Thought for the Week: Ethical investment
Ian Kirk-Smith reflects on a quiet revolution
A quiet revolution has been progressing amid the worst financial crisis for decades. It is one that Quakers helped to pioneer and that they are continuing to develop.
It is a bright, encouraging light amid a period of darkness and one that should be celebrated and supported. Ethical investment is no longer a fringe activity. It has become a significant movement in the financial sector.
The amount of money invested in the UK’s green and ethical retail funds is at an all-time high of £12.2 billion, according to data released from EIRIS. In 2001 this figure was £4 billion. The number of investors putting money into green and ethical funds has also tripled in the last decade.
Investments in small-scale, social, environmental and community based businesses are now worth in the region of £1.6 billion to the UK economy, according to new figures released by the investment platform Ethex.
The Ethex study reveals that the figures for positive investing are due to one million people helping to fund eco-friendly and community initiatives. The revenue comes mostly from small investments of between £100 and £500 in value – with social enterprises, credit unions and community projects.
This revolution is not one of idealistic theory. It concerns real money invested in real projects, people and institutions. The Ethex platform itself contributed £265 million to the total, with the rest made through credit unions (£762 million), Triodos Bank funds entrusted in the UK (£529 million) and community share issues (£25 million). Positive investment supports fair trade, renewable energy, sustainable agriculture and forestry, green transport and social property.
This week National Ethical Investment Week (NEIW) places an annual spotlight on this quiet revolution. It aims to ensure that everyone is aware of the green and ethical options they have when it comes to taking financial decisions.
A wide range of investments are now available that can be labelled ethical. Some funds avoid investments that do harm, which means that they do not invest in companies that, for example, produce alcohol, tobacco or weapons or are involved in the extraction of fossil fuels. Others try to do good by buying shares in companies and social enterprises that are actively doing good, such as those that specialise in environmentally friendly technologies.
Anti-Slavery day, which is held annually on 18 October, falls this year, appropriately, during National Ethical Investment Week. The day provides an opportunity to draw attention to the subject and to pressurise governments, local authorities, public institutions and public and private companies to address the scale and scope of human trafficking and modern day slavery. Part of this relates to the way people are employed.
At the heart of the matter is an important word: choice. Most people have a choice over how their money is spent. They make choices every day, for example, in the shops and supermarkets.
There was a sense of helplessness among many people during the economic crisis. They watched from the sidelines, with shock and bemusement, as a bleak story unfolded. They were powerless to intervene. They were angry. We can criticise the present system, however, until the cows come home. It is much more constructive to offer positive alternatives. Today, more and more people are joining this quiet revolution by making, as consumers and investors, informed choices that are prompted by conscience and concern. It is good to see Quakers at the heart of this movement (see ‘Witness or whitewash?’ in News).
Carlos Joly, a fellow of the Cambridge Programme for Sustainability Leadership (CPSL), recently reflected a growing optimism when he said: ‘Pursuing environmental and social goods does not have to preclude robust returns on investments. On the contrary, we can create a virtuous circle, whereby considering environmental and social factors in investment decisions can drive both economic prosperity and societal wellbeing. That is the only secure basis on which business and long-term investment can flourish.’
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