Good ethics are one thing, good returns are another. Here are just some of the reasons why ethical investing makes good financial sense:
- Demand for ethical and sustainable products and services - like those many of the companies we invest in provide - is increasing.
- The renewable energy sector has a much more promising future than fossil fuels.
- Investing in sustainable companies allows investors to avoid being financially impacted by disasters associated with unsustainable companies, such as a water contamination disaster caused by Coal Seam Gas extraction (we avoid investments in CSG).
^ 7 Year Per Annum Returns (net of management fees) to 30 June 2011. Past performance is not neccesarily an indicator of future performance.
Source: Responsible Investing Association of Australia, 2011 Benchmarking Report
Active vs Passive investment management
Many other funds don't select shares that they expect to perform well financially; rather they invest in a pool of shares without looking at each company's financial credentials - this is called passive funds management. In contrast, active managers like Australian Ethical only invest in shares we expect will perform well financially.
Of course, we don't stop there! All of the companies we invest in must pass our strict positive and negative ethical screens.