Ethical investments top growth charts

Wednesday, 14 December 2005 04:22

People investing in ethical funds do not have to sacrifice growth, new figures show.

This good news comes as the amount Britons are spending on green goods soars.

John Pyburn, marketing director at financial services group Canada Life UK, explained that as awareness of environmental matters increases, the appetite for ethical funds has increased.

"There is growing demand for investment products which enable people to feel good about their decision to invest as well as have confidence in the performance," he explained.

And this appetite has been matched by performance.

"Traditionally ethical funds tended to be viewed with some scepticism. Sectors which perform well in times of poor stock market performance, such as oil and tobacco, would be excluded from these funds and thus restrict performance," Mr Pyburn said.

"This is no longer the case as most companies' environmental and corporate social responsibility policies are high on the agenda. In short, there is a wider choice of 'ethical' companies for fund managers to choose from and these companies are often market leaders in their sectors."

Research published in the Journal of Business, Finance & Accounting shows these funds are now performing as strongly as non-ethical funds.

There are around 70 ethical funds on the UK market, worth a total of £5.5 billion.

And this is set to grow.

The Co-operative Bank's annual Ethical Consumerism Report suggests that green could be the new black.

The report finds that in 2004 Britons spent £25.8 billion in line with their values, up 15 per cent on 2003, almost five times that growth in overall spending.

And as this spend increases it can only be good news for ethically sound companies and their investors.

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