Change Alley

information, opinion, conversation

Ethical Investment Made ‘Simple’

with 3 comments

hl-ethical.jpg

Hargreaves Lansdown, the UK investment management group, is making an effort to emphasise its ‘green’ credentials. To mark the launch of their Socially Responsible Investment service, they are offering a free tree to anyone who invests a minimum of £3,000 or £100 per month in any fund mentioned in their Ethical Investment Guide. A free copy of the Guide can be downloaded here, although you do have to register first.

HL also offer a handy little Ethical Investment Fund Comparison Tool, which “allows you to quickly see which funds meet your ethical investment requirements. Select the ethical and environmental criteria that are most important to you to see a shortlist of funds that apply those policies and the full details”.

hl-comparison.jpg

Sadly, if you filter out all the Bad Things you get

hl-results.jpg

None of the 66 funds that have a stated policy on each of the categories, and therefore merit inclusion in the comparison, meet what I would call truly ethical criteria. I would not knowingly invest in a company that involved itself in any of the activities on the negative screening list, except maybe nuclear power, and unticking that box doesn’t make any difference. Something tells me someone’s not really walking the walk on this one. Have a play with the comparison ‘tool’ and see what you think.

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Written by Pete Smith

November 12, 2007 at 3:13 pm

3 Responses

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  1. Oh dear. Good detective work Pete. Obviously the public are dumb in HL’s book. Don’t they know we’re communication and information savy?!

    matt

    November 12, 2007 at 3:28 pm

  2. Trucost did a good report recently on the greenness of funds and found that SRI policies made pretty much no impact on their carbon footprints.

    I think that SRI is a red herring anyway – debt and equity markets are so deep that you cannot alter the cost of capital for any type of legal company by refusing to invest in it: someone else who doesn’t care will happily take your place if the expected returns look right.

    The only preference that markets have for SRIs is a result of their lower exposure to future regulation and customer preferences. If one doesn’t like pornography or companies that invest in animal testing, for example, refusing to invest in it will make no difference at all – but you can stop consuming it and lobby for it to be made illegal.

    Dan

    November 12, 2007 at 3:49 pm

  3. Then there’s the very real world these investment houses have to negotiate with overseas investment. With China now the huge engine of growth on planet earth some of that investment steers their way.

    See however the very excellent China Law Blog post below to get a flavour of just how difficult it is to get on the ground market intelligence for basic investment criteria, let alone sustainability issues;

    http://www.chinalawblog.com/2007/11/breaking_news_china_changes_fo.html#comments

    matt

    November 12, 2007 at 9:33 pm


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