How Does Ethical Investment Work?

There are many different approaches to ethical investment. That is why it is best to talk to an adviser that can guide you through the differences between the various methods used.

For example, as at 31/3/03 there were 55 'ethical investment' funds in the UK.* Each of these has a different set of criteria as to what constitutes ethics, and applies this in varying ways.

* Source - EIRIS

Ethical investment Funds may take one of two approaches:

• Screening
  This involves applying positive or negative criteria, such as avoiding companies that are involved in arms production or pollute the environment. Similarly they may seek out good companies with positive relations with their employees, or who follow good environmental policies.
  
• Engagement
  Here funds take a less strict approach in that they seek to use their influence as shareholders to positively influence good practice. This therefore means that some companies that would be excluded under the criteria above, may be included.

The difficulty with this area is that one person's beliefs will be different from the next person's. How can you be sure that the ethical investment fund that you select matches your beliefs?

At Woodruff Financial Planning, we operate a specialist database which can match your beliefs with the appropriate ethical investment. This way, you can be sure that you support those areas in which you believe, and stay away from those that you do not.

Click here to download a leaflet on ethical investment.

Please contact us to find out more about ethical investment.