There’s definitely a growing awareness in the world of our responsibilities as consumers. We know to think about where and how our clothing is made, we’re leaning towards organic food and we’re trying to leave less of a carbon footprint on the world. Or at least, lots of people are and imho, so should you. But one thing I at least have never thought about is ethical investing.
Huh, what? Yeah, I didn’t know either so I spoke to Will Richardson, Managing Director of Giant Leap Fund who are dedicated to helping ethically-minded businesses grow. He’s also a part of The New Investors on Yahoo Finance. So basically he knows his stuff.
Ethical investing is basically choosing responsibly when you decide you want to start investing, just like many people are doing with all the other choices in their lives.
“It can mean deciding not to invest in things you may believe create harm (i.e. fossil fuels or munitions) or it can mean supporting things you care about like renewable energy or providing education and health solutions to groups who haven’t traditionally had access to these services,” says Will.
So while companies providing “goods and services that are beneficial for the world” might be the big goal, you can also do your part by choosing to invest in businesses that have an ethical supply chain and/or company culture. How do you tell who these companies might be? Will reckons you should look for B Corps.
“B Corps are organisations that have been certified by an independent body called B Labs to verify organisations that operate in a way that is good for all stakeholders not just shareholders.“
Investing can be intimidating at the best of times, so beyond B Corps how do you identify an ethical company without doing your head in? Mainly, get someone who knows what they’re doing to help you.
“It depends on the type of asset class you are considering,” explains Will, “Ethical financial advisers and funds are great to help understand your objectives, risks, and options. I recommend looking into the Ethical Adviser Co-op which is a member group of Australia’s most trusted ethical advisers. There are dedicated ethical superannuation funds called Australian Ethical and Future Super who specialise in this area. People should seek advice and also speak to others who have previously invested to get a sense of who to trust.”
“The Giant Leap Fund exists to prove that trading off financial returns for impact is a myth. There is ample evidence that considering environmental, social and governance factors actually leads to better financial performance.“
So yes, you can make choices for the betterment of the world and still make yo’ money. Like with anything, it might not change the world immediately, but every little bit counts. I’ll leave you with a hot tip from Will to kick-start your research into ethical investing.
“Credit unions are an interesting place to consider parking your cash at night. There are listed equity or stock solutions that have ethical screens such as Beta Shares ETF.“
“There are green property funds also known as REITs (Real Estate Investment Trusts). There are a wide range of managers creating product in the private equity and venture capital space investing for scalable impact solutions across sectors such as health, education, agriculture. There are also infrastructure players who invest in solar and wind renewable energy farms.“
Happy making positive changes everyone!