Investing ethically means that you know what your money is doing and what it is funding.
Ethical investment is also known as sustainable investment and socially responsible investment (SRI). The term describes an investment process that incorporates environmental and social factors when selecting investments, in addition to the objective of achieving a competitive financial return.
What makes us different
While many ethical funds adopt one or two ethical investment methods, Australian Ethical applies three methods to identify positive investments:
- Negative screening - Avoiding investment in industries which have a negative impact on society and the environment.
- Positive screening - Proactive search for investments that contribute positively to society and the environment.
- Corporate engagement - Dialogue with companies invested in for the purpose of raising issues of concern and advocating positive change to company practices.
Why don't we use the 'best of sector' method?
A common ethical investment method is ‘best of sector’. This method attempts to select the ‘best’ companies in all sectors and industries.
The weaknesses of this approach are:
- there are no exclusions applied in terms of sectors and industries. Therefore investments may be made in industries which are not sustainable or socially positive, such as tobacco or uranium.
- companies may be identified as sustainable or ethical based on token practices.
We invest in positive sectors and industries, as well as selecting the best companies within these, provided that they meet our ethical criteria.
Easy access to the companies we invest in
Australian Ethical always keeps investors informed on what companies we invest in, because we believe it is important that you know.