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Investors in the dark
More than half of private investors have no idea how their funds are invested
- 51% people are interested in companies' ethical records
- Yet just 20% investors are aware of the unethical activities undertaken by the companies they invest in
- 13% of people with investments planning to increase this year the proportion they invest in ethical or SRI funds or pensions.
More than half (54%) of private investors (with pension funds, ISAs or investment funds in their name) have no idea how their investment or pension funds are invested according to research from Triodos Bank for National Ethical Investment Week.**
The research, which comes hot on the heels of a wave of recent scandals at mainstream retail and investment banks, demonstrates the UK's growing ethical appetite when it comes to purchasing or investment decisions and illustrates consumer misgivings in the way mainstream banks have been managed following these recent scandals.
The figures reveal that, when deciding on purchases, from buying electronics or making investments, half (51%) of all UK adults are interested or very interested in the ethical records of the companies they buy from or invest in. Furthermore two in five (39%) take time to research the company's ethical record and 80% believe companies have a duty to behave ethically.
Despite this, just 20% of investors are aware of the 'unethical' activities undertaken by the companies in which they invest.
Of potential 'unethical' activity, forced / child labour is the most unwelcome, with 66% of investors refusing to invest in companies that engage in it. 51% are turned off by investments in arms / munitions, and 40% would be put off investing in companies that engage in animal testing.
Huw Davies, head of personal banking at Triodos Bank, commented: 'As the world becomes increasingly smaller, with 24 hour news channels broadcasting both negative and positive activities of global companies, people are more informed than ever about the impacts of their purchasing and investment choices.
'And we know from the increasing number of customers choosing to save with us that people are beginning to take a more conscious approach to their finances and realise the power of their money for good.
"Recent years have seen a rise in ethical consumerism, from fair trade coffee, to green electricity. Increasingly, and especially since the summer's banking scandals, the public is also asking questions of their banks and other financial providers. How are they run, what are they investing in and what are they doing with their savers' money. Ethical banking and investment offers an alternative, so that customers know their money is not doing harm, while still generating a decent return."
The figures also show that 13% of people with investments are planning to increase the proportion they invest in ethical or socially responsible investment (SRI funds) or pensions this year.
Triodos SRI fund launch
Triodos Bank is preparing to launch two SRI funds this autumn, both of which will also be available within a Triodos Ethical stocks and shares ISA.***
The funds, which are subject to one of the most rigorous screening processes in the SRI marketplace, come with a long track record, having been available in Europe for 15 years. Sterling share classes are now being made available for UK investors.
The Triodos Pioneer fund is a global equities fund investing in small and medium-sized listed companies - for example, bicycle manufacturer Shimano or medical equipment manufacturer Smith and Nephew - that focus on the sustainable themes of climate protection, healthy living, clean planet or are pioneers in corporate social responsibility.
The Triodos Sustainable Equity fund is a global equities fund investing in listed companies, such as British Land and Whole Foods Market, delivering superior social and environmental performance.
Davies commented: 'We challenge UK investors to consider the impact of where they chose to invest, in the same way as thousands of savers have moved their money to more sustainable and ethical alternatives. The more money entrusted to our SRI funds, the more pressure we can apply on businesses to improve their sustainability performance and improve quality of life on a global scale. '
Triodos' screening process takes a zero tolerance approach on four sectors, completely excluding all investments nuclear, oil tar sands, hazardous materials and weapons. It then applies its minimum standards to create an investment universe of around 350 companies available for investment.
Triodos takes a fully active approach to company engagement, engaging with companies before, during and after the selection process believing that even a small change in the policy or practices of a major company can make a significant global impact. For example, after Triodos liaised with GAP Inc, it clarified its policy on fur and specialty leather. Engaging with paper manufacturer Kimberly-Clark led to clarification of the certification schemes used when sourcing wood fibres, as well as its stance on indigenous peoples.
The Triodos Sustainable Equity Fund delivered a return of 22.7% over the past year and has out-performed its benchmark (Morningstar large-Cap Blend Equity) over one, three and five years. The Triodos Pioneer Fund (benchmarked against Morningstar Global Small/Mid Cap Equity) delivered returns of 0.1%, 2.0 and -5.8% over one, three and five years respectively. Both funds have three-star Morningstar ratings.
Investors wanting more information should call Triodos on 0800 328 2181, register interest online at www.triodos.co.uk or speak to their IFA.
Notes for editors
For further information, case studies or interviews, please contact:
Lisa Stanley, firstname.lastname@example.org 0117 980 9721 / 07983 002013
Faye Holst, email@example.com 0117 980 9584 / 0755 778 5167
Will Ferguson, William.firstname.lastname@example.org 0117 980 9770 / 07899 965640
* Research conducted by Opinium Research among 2012 UK adults between 25 and 28 July 2012.
** National Ethical Investment Week 14 - 20 October. EIRIS figures show interest in ethical investment continues to grow 2011http://www.eiris.org/media.html#marketstats2011 )
***About Triodos SRI funds
The funds will be offered in the UK via SICAV 1 sub-funds. The UK share classes will be offered in sterling. When comparing returns for these share classes to those generated for the Euro share classes offered to European investors, returns will be affected by currency fluctuations between Sterling and the Euro.
The funds, managed by Delta Lloyd Asset Management, will both also be available within the Triodos Ethical Stocks and Shares ISA. Investors can choose from accumulating or income sterling share classes. The annual management charge for the funds is significantly lower than market average - 0.95% for the Sustainable Pioneer Fund and 0.75% for the Sustainable Equity Fund. The minimum investment is £1,000 per fund. The initial fee is 4% though this may change during offer periods or sales. There is a minimum lump sum top-up of £500.
About Triodos Bank
Triodos Bank only finances enterprises which create social, environmental or cultural added value. Key sectors include organic food and farming, renewable energy, social housing, and fair trade. Transparency is a core value and Triodos publishes details of every business it lends to. A range of personal savings accounts is offered, and full banking services are available for businesses and charities. Triodos Bank is an independent bank founded in the Netherlands in 1980. Its principles and independence are protected through a special shareholding trust. The UK office opened in 1995 and is based in Bristol.
Triodos Bank offers a range of personal savings accounts as well as other investment opportunities. The Triodos Online ISA currently pays up to 2.52% AER and the Triodos Online Saver Plus pays 2.52% AER including a 1.5% 12 month bonus. Ethical savings bonds paying up to 3.75% AER are also available, as well as the Ethical Junior Cash ISA paying 2.01% AER. Full terms and conditions for these products can be obtained from www.triodos.co.uk