The rise of ethical investing

"The money invested in responsible investments grew by 28 percent last year to $78.7 billion", says Tony Field from NewsHub.

So what is responsible investment? In the words of the Sustainable Business Network, "responsible investing means asking, or finding out, whether your investments take environmental, social, governance and ethical factors into account, rather than being channelled into industries that might go against your own morals".

Investing ethically is becoming a growing trend in New Zealand, with more investors taking action to support industries better aligned with their personal beliefs.

Ethical investing is sometimes easier said than done - depending on whether you are talking about a direct investment, such as a share in a company, or a managed fund where your money is pooled with other investors and invested in a particular fund such as KiwiSaver, it might be difficult to tell where your money is invested.

In the past, there were some questions being asked around the profitability of ethical investments, with a belief that investors were actually missing out. The Responsible Investment Association Australasia (RIAA), however, says "the core responsible investment share funds outperformed both the ASX300 and the average large cap Australian equities funds across one, three, five and ten year funds - five year returns for responsible investment funds beat the wider market in Australia".

More and more investment managers are staring to offer responsible investment options to their clients. It is always best to ask how they select their investments and what sort of companies they exclude or include, as their idea of ethical investment might not align with yours.

If you want to get started on this path, the Sustainable Business Network has some tips to help you on the path of responsible investing.

"Investing responsibly: the basics", Sustainable Business Network.
"The rise of ethical investment", Tony Field, Newshub.co.nz.


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