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Our study shows that two-thirds of investors could be unwittingly supporting unethical industries

"A big part of the problem is the lack of transparency in financial products – it should be much easier for the average investor to find out which companies and activities their money is financing so they can make informed decisions."

Huw Davies, Head of Personal Banking, Sales & Marketing at Triodos Bank paints a very clear picture; it should be simple for investors to know where their money is going.

Despite this, an alarming number of UK investors are unaware of which industries their investments are financing, and could potentially be invested in activities they are morally or ethically opposed to, our new research shows.

  • Our study reveals that almost two-thirds (63%) of investors don’t know whether the activities of industries or companies they are investing in are ethical or not, finding UK adults at risk of investing in companies or industries to which they are personally opposed
  • Human trafficking, forced / child labour, and pornography top list of investment turn-offs
  • 71% of investors want more of their pensions and investments to be invested in environmental and social sectors, such as renewable energy and sustainable business

Investments made through pension funds and stocks and shares ISAs, for example, can lead consumers to inadvertently finance activities they ethically or morally object to. A recent analysis of local government pension schemes in the UK revealed that more than 4 million government workers had £14bn invested in fossil fuel companies.*

Today’s survey shows that the vast majority (85%) of investors said they would act if they felt their investments conflicted with their personal ethical preferences. As part of the research, we asked respondents to highlight practices which would stop them investing financially in a particular company, fund or pension. The top five are:

  1. Human trafficking - 70%
  2. Forced / child labour – 67%
  3. Pornography – 49%
  4. Animal testing – 45%  
  5. Arms / munitions – 41% 

"The results show that people do care about the activities their pensions and investments are financing, and would be willing to act if these clashed with their principles. But with almost two-thirds oblivious to where their money is being invested, millions run the risk of inadvertently investing in areas which contradict their personal ethical preferences" added Huw.

The research also showed an appetite for ethical investment, with 71% of investors saying they want more of their pensions and investments in environmental and social sectors. Almost half (46%) of investors would like more of their pension or investment products to be invested in renewable energy while 43% would like to invest in healthcare and 37% in sustainable businesses.

"Our research shows that investors are willing to support more sustainable activity, but are likely to be missing out unless they’ve taken active steps to do so such as investing in SRI (Socially Responsible Investment) funds.

Individual investors can make a difference by taking a look under the bonnet of their pensions and investments, and doing something about it if they’re not happy with what they discover" concluded Huw.

* http://gofossilfree.org/uk/pensions/

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