Ethical investment is a crap name. It sounds like you have to wear a cardigan and faint at the sight of blood, but it's what people call it. The new name is Socially Responsible Investment or SRI (which isn't much better).

There's a genuine difference between the two philosophies. Ethical investment generally means not engaging with companies you don't like, say screening out alcohol, tobacco, arms and gambling. This satisfies the investor but has little effect on the outside world. Refusing to deal with a company because you don't like how they do business only affects you, not them.

Engaging with companies

By contrast, SRI does two things — it invests in companies which are operating well, and seeks to influence those that aren't.

Bearing in mind that capitalism is an utterly amoral, value-free system, there are three options with companies: ignore them, protest against them or engage with them. The first makes no difference, the second might be fun but doesn't work. But if you vote at companies' AGMs, they'll take notice. You can demonstrate that you support the company's right to make money, but are concerned about how this is done.

True, it's not always a simple process. Even if you can demonstrate that by adhering to an environmental or human rights policy the firm will make more money, it won't necessarily act.

"Large organisations are terrified of change"

Large organisations have enormous inertia. They move slowly and they're terrified of change. They claim to embrace the new, but this is mostly media hype: they like the tried and tested, albeit dressed up as the “hip and wicked”.

But SRI continues to grow and as it becomes more powerful, companies listen harder. SRI currently has over £4 billion in the UK stock market, and punches significantly above its weight. The industry magazine Money Management has confirmed “the typical SRI fund — regardless of type — comes out on top of the corresponding average non SRI fund”. Responsible investors make money as well as saving the planet.

Careers that change the world

A job in the field requires imagination, persistence and a thick skin. It's not for the faint hearted or for introverts, but neither is it rocket science. Everyone is an ethical investor. Even the crustiest old reactionary like your dad would prefer that their pension was invested in something that won't destroy the world of their grandchildren. They just never realised they had a choice.

By entering a career in SRI, you can help people make financial decisions that really do change the world.


Barchester Green Investment
www.barchestergreen.co.uk