FINANCE
Paul Lewis
ETHICAL INVESTMENTS / MONEY NEWS
As we all become more ethically conscious, it makes sense to go green with your investments too. But how do you ensure your cash supports the firms you want it to? Our columnist takes a look at sustainable share options
Ethicalinvesting used to be a bit of a backwater. Not any more. Over £2 trillion is now invested worldwide in what are called ESG funds. The ‘E’ does not stand for ‘ethical’ nor does the ‘G’ stand, as you might expect, for ‘green’. This new acronym stands for Environment, Social, Governance – three new buzzwords that are supposed to include ethical and green investments.
Environment generally means no money invested in oil production or mining. Social denotes that the firm does good rather than bad – so nothing in tobacco where the products kill their customers slowly. And Governance means running a business ethically – one that pays and treats its staff well and ensures any goods or materials it uses from other countries have not been made by children or slaves and the factories involved do not pollute the local rivers. Sometimes the word ‘sustainable’ is used instead of ESG and it has its own acronym, SRI – Sustainable and Responsible Investing.