Do Ethical & Sustainable Funds make a difference?
It’s correct to say that some ethical and sustainable funds fail to live up to the marketing. Claiming to invest positively, when in reality, little of the fund is invested that way. However, there are many good funds that truly invest in solutions to social and environmental challenges. For example climate change, pressure on resources and an ageing population.
Given the size of these challenges, there is a real need for investment at a corresponding scale. Investments in healthcare solutions, renewable energy infrastructure, resource efficiency and social housing make a very real difference.
Indeed, the best funds report on their impacts, so an investor can quantify the real-life impacts that their money is enabling. For example, fund manager WHEB offers a tool that shows how many tonnes of carbon an investment helps to avoid, as well as the volume of resources recycled and clean water provided.
It could be argued that much of this would happen anyway as shares are traded, with buyers and sellers, but there are new issues, rights issues and placings that raise new capital. Healthy demand for shares also contributes to the success of these companies. Over time, these capital flows help to change the economy to a more sustainable future.
Many of the fund managers also engage with the companies in which they invest. Through company meetings, fund managers encourage companies to adopt better standards of sustainability. This can have profound impacts. For instance, retail companies have been helped to improve their supply chains in human rights terms.
Please note that the Positive Pennine Portfolios are only accessible via a Financial Adviser. If you are a Financial Adviser and would look more information, please contact Sean Fisher on 07583 241668 or e-mail
Investors should remember that the value of investments, and the income from them, can go down as well as up. Investors may not recover what they invest. Past performance is no guarantee of future results. Any mention of a specific security should not be interpreted as a solicitation to buy or sell a specific security.
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