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Investing with a social conscience: The Fry Group Belgium looks at the rise in ethical funds
Do you need to be a dreamer to invest ethically?
As society adopts greener ways of living, from reducing carbon footprint, ditching plastic bottles and learning how to reuse and recycle, consumers are increasingly thinking about how to invest ethically. While Socially Responsible Investing (SRI) may once have been the domain of dreamers, it’s now also proving to make financial sense as well. Here’s some information from financial advisors The Fry Group (Belgium).
So what is SRI?
As the importance of good governance and environmental stewardship continue to be at the forefront of politics and media, the need to ‘do good’ with money is becoming an ever more popular trend with investors. In recent years, different forms of socially responsible investing, including ESG (Environmental, Social and Governance) and Impact Investing have emerged as part of the investment industry.
Socially responsible investing is a way for investors to seek profit while tailoring their portfolio to causes they care about. These investment options stay away from so-called ‘vice’ industries such as alcohol, tobacco, gambling, pornography and armaments. They also avoid putting money towards companies who have human rights violations, cause damage to the environment (such as mining corporations) or use animal testing on products or services.
Instead, they focus on industries and companies that have a positive impact on the world, population and environment. This can include work in social justice, environmental sustainability, alternative energy or clean technology. The theme of climate change is now also a big investment driver.
What are the benefits of SRI?
A major benefit is the positive impact on your own conscience; you can rest assured that your personal beliefs don’t need to be sacrificed to gain a profit. You can ‘Do Well by Doing Good’.
For example, if you are against genetic engineering and intensive farming you now have the option to support those beliefs fiscally and take your capital where these and other criteria are screened out. If you are concerned about climate change, then you can exclude coal, oil and gas as well as deforestation from your portfolio.
Historically, the ‘vice’ industries have returned good profits for shareholders but by moving capital elsewhere this represents a new form of sanction that can have a large fiscal impact on a company’s bottom line.
Is it just for dreamers or are they solid investments?
Here’s one example of the massive growth in ethical investments. Net flows into European sustainable investment funds during the first half of 2018 were at their second highest level in the past five years, exceeding €32bn*. That’s €32,000,000,000!
As financial advisers The Fry Group can help clients find the best Socially Responsible Investment strategy by exploring all the options that match an investor's preferences.
Please read here for more information
The Fry Group (Belgium)
Avenue de Tervuren 168
02 639 45 60