change is a very high profile topic with everybody trying to jump on
bandwagon, and financial institutions are no exception. Ethical
investment is a
great opportunity for conscientious investors to help with the future
planet, but are all the funds that claim to be ethical really committed
we just seeing a token burst of green wash?
might think climate change is the single biggest issue facing us, and
you agree that it needs a huge financial input to even scratch the
the problem. If you are thinking about doing your bit by investing in a
change fund, you may be surprised if you look below the surface and
just how ‘green’ some of these funds really are.
change’ is a broad term that is applied to any fund that claims to be
investing in companies that have something to do with tackling climate
issues. They range from very general funds that invest in almost
(including arms and tobacco) as long as it has a suitably strong
policy, to very specific funds that invest only in one specific part of
specific sector such as renewable energy.
are different from traditional ethically screened funds because they
concerned with negative screening or engagement. They positively
very specifically whilst others are very vague.
throw a little light on this subject, we have reviewed 12 climate
and revealed some interesting facts:
out of these 12 funds invest in the nuclear industry – claiming that
better the world doesn’t fry, even if it means risking another
invests in BAE Systems, presumably on the basis that they are
environmentally harmful bombs.
fund even has the following negative comment:
inclusive fund with exposure to arms, tobacco, mining as well as
nuclear – 10% of fund goes into companies that could be deemed to be
connected to climate change in any meaningful sense.
Very high (and
unreasonable!) ongoing costs with the performance related fee
best performing fund was the Schroder’s Global Climate Change fund
- the worst the Guinness Alternative Energy Fund with a 44%+ difference
in the returns.
are climate change funds “ethical funds” in the traditional sense?
Not really, but perhaps they fall into the “Socially Responsible
Investment” camp. The jury’s out on this one so we suggest you
judge for yourself. We’ve made the report available on our web site
and I’d be very interested in your comments.