What is Ethical investment
Ethical investement puts money where it does some good. Yet investing ethically is a broad church. The range of investment choices is large, from the ethical investment funds to crowd funding projects and community energy.
Ethical investment funds
Ethical Investment funds are collections of various investments all of which are supposed to be ‘ethical’. A major issue around this sort of approach is who advises on what to invest in. Some ethical investment funds suggest that putting money in Tesco, as opposed to BP, is an ethical choice. We think this is more like a neutral investment than anything else – it’s just putting your money where it does less harm. It’s a careful distinction, but it’s not really a positive investment choice – it doesn’t really do anything.
Ethical investment advisors
This sort of investment strategy is also common to an ethical investment advisor. He or she is highly regulated and in order not to contravene the rules, they may decide only to advise shares that are in the FTSE 100, for example. Again, if there are no clear choices on what to invest in that does some good, the ethical investment advisor may come down on suggestions that do the least harm: hardly a progressive ethical investment approach.
In general, ethical investment funds and advisors are likely to deliver only a mildly ethical investing options.
Crowd-funding ethical investment
If you’re looking to be a bit more proactive with your money, the good news is that technology has changed the investment industry. Your options are now much more diverse. With the rise of crowd-funding it’s now much easier to identify investment in businesses that do simple good, without just being the best option in the face of a multiple of bad choices.
Ethical investment and Communty Energy
One sector of the ethical investment industry is Community Energy. Community energy investment is based on the community energy business model, and usuall involves solar energy.
Any solar investment is a positive choice about electricy generation, but community energy is also making a positive choice about who owns a fundamental part of our economy.
There are several hundred groups that constitute Community Energy England, all of which use crowd-funding to support their schemes. More than £200m has been invested in the UK this way. There are also various community energy platforms (like Ethex) that exist to support communty energy funding.