The UK invested more money ethically in 2007 than ever before according to EIRIS, the non-profit sustainable investment specialists. The organisation announced on February 29 that as at 31 December 2007, £8.9 billion was invested in Britain’s green and ethical retail funds. EIRIS goes on to state that there are almost 100 environmental and ethical funds available to British investors and that this trend is likely to continue in 2008.
Interest in environmental funds may slow down temporarily because of the predicted economic downturn for 2008 a new report has found. A guide to climate change investment, published in February 2008 by financial advisory firm Holden Partners, predicts that investors will become more risk adverse. However, the research states that the “drivers of the environmental economy – climate change, population growth, growing waste and resource depletion – remain firmly intact” and concludes that the long-term outlook for the environmental investment sector and the environmental economy looks good.
The report aims to inform people about investment choices with regard to climate change and sets out to show potential investors how to participate in and benefit from investment in the environmental market. Holden Partners plan to up-date the guide every six months.
Three of the world’s largest banks, Citi, JP Morgan and Morgan Stanley, have developed The Carbon Principles – a set of commitments that are aimed at assessing the carbon risks of financing the US electric power industry. It is the first time that financial institutions, advised by clients and advocacy groups, have come together to develop a framework that sets out to meet the energy needs in the US but at the same time balancing cost, reliability and climate change concerns.
Adopters of The Carbon Principles, which were launched on February 4, will commit to:
> Encourage clients to pursue cost-effective energy efficiency, renewable energy and other low carbon alternatives to conventional energy generation, taking the potential value of avoiding carbon emissions into consideration.
> Ascertain and evaluate the financial and operational risk of fossil fuel generation and to use this information to determine whether a transaction is eligible for financing and under what terms.
> Educate clients, regulators, and other industry participants regarding the additional diligence needed for fossil fuel generation financings, and to encourage regulatory and legislative changes.
Eiris, the sustainable investment specialists, launched a free Ethical Funds Directory on January 24 to help consumers and financial advisors find an environmental or ethical fund that matches their ethical concerns.
The directory offers comparable information on ethical retail funds available in Britain and includes information on each fund’s ethical investment strategy, positive and negative screening criteria, voting and engagement policy and approach, research resources, fund manager contact details and links to further information.
The Finance Network for Sustainable Energy was launched in London on February 25 and aims to support investment in the growing renewable energy sector. It is a network of City financiers, renewable energy entrepreneurs and advisers to build relationships and educate one another about the sector and has been established by the Renewable Energy Association and the UK Social Investment Forum.
Contact Philip Wolfe, executive director, REA 020 7747 1830 www.r-e-a.net; Adam Ognall, deputy chief executive, UKSIF 020 7749 9951 www.uksif.org
No investment in airlines
Standard Life Investments announced on February 5 that its ethical funds will no longer invest in airline stocks. This was the result of feedback received in the Standard Life 2007 annual ethical investor survey in which 30% of respondents stated that they would prefer a complete exclusion of airline stocks from the funds.
The investment firm manages £588.5m over its ethical fund range which includes UK Ethical, Ethical Corporate Bond, European Equity Ethical, Life Ethical and Pension Ethical Funds. The firm also launched www.focusonethical.co.uk earlier this year. The micro-site features fund manager interviews, ethical stock stories and ethical guidelines and literature about ethical investment.
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