2018 is all very #touchy-feely. Every financial firm in town suddenly appears to really care about women customers. Gareth Southgate has promoted kindness and managing with hugs. And ethical investing (whatever that means) is on the menu.
No matter how you position it, there seems to be a growing desire to be more conscious. What started with council enforced recycling and a plastic bag charge now has select subsects of investors exploring what it means to be an ethical investor. Legal and General have seized the moment and created some lovely looking content with Saatchi and Saatchi. Bold and beautiful. But does it have substance and what do investors think?
Investors are very much split on use of ethical investments. Our DIY Digital Wealth and Robo report found that a third of investors are interested and 42% say they are ‘potentially interested’, with interest peaking for a younger audience. Over 55% of under 45s said yes, compared to only 23% of over 55s.
Responses differ from those who view it as a must to those with no pretence at seeking anything other than maximum gain and stuff the consequences. Here are a few choice snippets.
In the No camp:
"Ethics are often flavour-of-the-month and the exact reasons behind situations are not always divulged. I don't always have time to worry about ethics."
"It's a bit of a fad. When the crash comes no one is going to be feeling any better that their investments were ethical."
"Structural stupidity in every aspect of society renders the concept invalid."
"Oil companies are good (or some are, including BP) - 'never sell Shell' has been a good motto for over 50 years, and big oil companies are now diversifying into energy, batteries and electricity retailing. So oil firms are becoming more ethical - lubrication will always be needed in engineering, even if transport (diesel and aero fuel = kerosene) and industry (e.g. plastics manufacture from crude oil and natural gas) may decline in the next decade."
And in the Yes camp:
Over the long term, those companies with a responsible attitude will do better, so it is hard-wired into investment anyway.
"I’ve been thinking more and more about ethical investing. I would need to know more though, I’d know that it’s really benefitting someone or something. Something like renewable energy for example."
"I am interested in ethical versions of portfolios - it makes financial sense to invest in sustainable investments."
The consumer jury is still out, but with providers such as Legal & General, Moola, PensionBee and Wealthsimple all adding ethical portfolios to their offering there is clearly a drive to enrich the values-based investing opportunities available to consumers.
Even for the doubters there’s something else to consider. Positioning investing as a way to own the world around you. A way to influence. And a way to change is very zeitgeisty. It’s very now. It will be a channel that will bring more people into the world of investing. And that is something we should all wholeheartedly support.
We are currently in preparation for our latest consumer report, focusing on ethical, social and governance (ESG) investing. We’ll be researching this over the next 2 months so let us know if you’d like to add any questions into the mix. We'll be launching the report in October – please contact us to secure your place at our free breakfast briefing