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What is an ethical investment?

13/01/2020

Have you ever wished that you could make a difference at the same time as making money on your investments?

Is that even possible?

If building your finances around ethical principles is important to you, then there are increasing opportunities to put money into sustainable and socially responsible investment projects. These are sometimes referred to as high-impact investments or even high-road investments.

These can be selected according to the priorities, preferences and beliefs you have, such as focusing on environmental, social or corporate governance factors.

Clearly, this is not the same as donating money to good causes. Ethical investment should balance your desire to invest in ethically based opportunities with achieving a substantial return on your investment.

Can you really make a difference with an ethical investment?

Apart from choosing funds that have clear ethical aims – and offer a good return for investors – there is something else you need to keep in mind.

Ethical investments are sometimes a strong option because of what they DON’T do.

Think about it. Many traditional fixed asset investments and other forms of savings through third parties are not always transparent.

Without thoroughly vetting the credentials of your investments, you may be unwittingly funding overseas organisations linked to human rights abuses or environmental damage. Or closer to home, tax evasive companies you would prefer not to support.

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