Essentials of Borrowing
Consumer 101 Ethical Investment
Money Makes The Arms Go Round Do you give money to the arms trade or to industries destroying our environment? Most of us would be shocked and indignant if accused of doing this. But traditionally, when we invest we give up the right to decide where our money goes and our hard earned cash could be propping up oppressive regimes without us knowing. Ethical investment gives us the chance to control the money we invest and prove that profit and principles can work together. Ethical investment is not a new idea. The Quakers in the 18th century used it to make a stand against the slave trade refusing to invest money in any business linked to it. More recently it was used to attack South Africa's apartheid with the state of California withdrawing $50 billion from the country.
With credentials like these it is easy to see why investment can be a powerful tool for social change. Thinking ethically means not compromising on your values or your pocket. For example, the Ethical Investment Research Service concluded ethical funds have a lower total risk then those without ethical criteria. There are broadly two types of ethical investing. The first is screening the companies you want to invest with to make sure their practices don't clash with your principles.
These can include bad environmental practises, the tobacco or alcohol industries, pornography, anti-trade union practises, or the arms trade. In addition to these concerns Muslims may prefer not to invest in financial institutions where there is interest-based gain. Secondly you may wish to actively channel your money to companies you approve of. These could be companies with good labour practices and safety records, organic farms or alternative energy companies, or those who benefit local communities. An independent financial adviser will help you find companies, tailored to your specific agenda. You may, for example, want to prioritise not supporting companies who work with oppressive regimes, but mind less about investing in the tobacco industry. Or you may not mind about alcohol production but be vehemently opposed to your money funding environmentally irresponsible corporations. Whatever you decide independent financial help means you can place your money where it won't damage your conscience. Why not start with your bank? Smile.uk is the Internet bank of the co-operative bank. It not only has specific ethical and environmental policies, but also fantastic rates on current accounts. They also have a huge range of ethical investments options. Triodos bank only gives business loans to organisations involved in sustainable development projects and savers are given the option of specifically channelling their cash into their preferred sector, whether this is social housing projects or organic farming. The Ecology building society uses your money to provide mortgages for energy efficient houses, ecological renovation or for rescuing derelict properties.
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