This week I want to turn your focus to ethical investing. It’s become a big topic for me, and it’s been especially on my mind over the past week – what with the extreme temperatures in the UK (in Northern Ireland especially), and the subsequent fires and floods. Worryingly, there’s been dams bursting and people killed by the impact. Yes, climate change is a reality, and it’s not something that we can ignore. You might think there’s not much you can do to help – but there is plenty that you can do and I’m going to plant some ideas into your mind.
We’re In Denial
Back in 1972, I read a book called Limits to Growth. It still sits on my bookshelf, and it was a prophetic read. I was stunned at the time. The book used primitive computer models to back up its reasoning and pointed out quite clearly that by the 2020s and 2030s, the problems surrounding climate change were going to become massive. It predicted population growth, food shortages and extreme weather and guess what? 50 years later, these basic predictions are becoming a reality. For years, so many people have been in denial, but I am adamant that we cannot deny or ignore the reality any longer.
From a financial point of view, look at it this way. Let’s say you’re 35 years old, you’re saving for your pension – and you’re looking forward to your retirement, eventually. Well, that’s all great but don’t bother saving up for your pension unless you’re going to use Green Funds to make sure the planet is livable by the time you’re 60 years old! Whatever you’re investing in won’t be worth much for the planet unless it’s ethical.
Environmentally Friendly Green Responsible Funds
At Interface Financial Planning, we are very keen on Ethical Investments, and we have a range of quite literally brilliant Environmentally Friendly Green Responsible Funds – that’s what they’re called, in short, EFGR Funds. Yes, some people call them something different. My Green Party clients call them Green Funds, my Quaker clients call them Ethical Funds but whatever you call them – they have purpose. Now, as far as I’m concerned, it’s about thinking of where to invest rather than the investment that’s going to give you the biggest return. After all, it’s all well and good to have that great return but if the planet fails and it becomes hard to live on it – what’s the point? To back that up, while ten years ago, pensions were all about which delivered the biggest return, nowadays Ethical Funds are performing far better than other types of investment funds.
Remember Solar Energy?
Let’s rewind ten years ago. There was a lot of investment into solar energy and wind farms. The result is that we get free energy from wind farms and solar panels because they’re installed and working their magic. The mission has been completed. In contrast, fossil fuels involve far more energy and have to be processed through refineries, transported and distributed – so, clearly these types of investments are not as profitable as investing in green energy.
We Owe It to The Planet
When people ask me about pension investments now, I’ve changed my focus. I used to let people get away with what I call “standard” funds, but now I feel I can no longer let people get away with it! I owe it to the planet and our children to guide people better so that the world is a safe place for people to live in the future. I care about the world, you should too and to that end, I’m pushing hard for my clients to invest responsibly and move any non-ethical investments to portfolios where they’re going to get a good return but also and importantly, where they will get a decent return and do something positive for the planet
Can you feel my passion? I hope so!
Please Invest Responsibly
I actually joined the UK Social Investment Forum (UKSIF) 20 years ago and when I did, people thought I was crazy. It is not simply about doing some good in the world. Yes, you could invest in funds where you don’t expect a return but I’m talking about proper ethical portfolios where you will get a return and you will also do some good. I read an article last week that said that if all pension funds were switched to responsible funds, it would make a huge difference to global warming. So, I’m urging you to invest responsibly, we all have to think of the planet otherwise what’s the point? The world won’t be here eventually and that is down to us. It’s time to act – the floods, the temperature changes, food shortages, population growth – we can all do something to minimise the impact and keep our planet protected for future generations! Please start by readdressing your investments and think carefully about making positive changes that will give you the lifestyle you want but also give other people a beautiful world to live in.