The recent financial crisis will help move ethical investment into the mainstream this year as an increased number of investors will seek reassurance that their money is being invested
The recent financial crisis will help move ethical investment into the mainstream this year as an increased number of investors will seek reassurance that their money is being invested responsibly.
That is the view of ethical investment manager Mike Fox who believes it could be defining moment for the industry as investor attitudes move to avoid irresponsible investments similar to those at the root of the credit crunch.
Fox, fund manager of the Sustainable Leaders Trust at The Co-operative Asset Management, says: ‘The financial crisis has shown that how you make money is equally as important as how much money you make.
‘We expect recent financial events to make ethical investment more appealing to investors that want to avoid being exposed to irresponsible business practices similar to those at the heart of the credit crunch.’
Recent data from the Investment Management Association indicates that ethical funds under management currently represent just one per cent of all funds under management in the UK.
Fox also cites three socially responsible companies that he believes are well to grow despite the downturn: Scottish & Southern Energy, the UK’s largest developer of renewable energy with expertise in wind and hydro power; Connaught, which works with local authorities to refurbish properties across the country; and Smith & Nephew, an orthopaedic company which specialises in hip and knee replacements.
‘As the baby boomer generation enters retirement [Smith & Nephew] is likely to see demand rise for its services, improving the quality of life for its patients whilst at the same time growing its profits for shareholders,’ says Fox.
Sister company, The Co-operative Bank has already benefited from a shift in consumer willingness to choose their financial service products on trust with a 40 per cent increase in retail savings and 61 per cent uplift in current account switching to The Co-operative Bank occurring during 2008.