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Green thinking
If you're someone who makes a point of buying Fairtrade goods and recycling your household waste, with principles of caring about other people and the environment, you might want to think about socially responsible investing.
This does not necessarily mean excluding "bad" companies like those in the tobacco industry for example. Socially responsible investment is any that takes on green, social or ethical principles.
The types of investments available range from opening a savings account with the Co-op, or investing in funds that hold shares in renewable or clean energy companies, through to funds that are focussed on a range of themes for example efficiency, health, knowledge or social housing.
Core values
If you avoid a certain product on a supermarket shelf because you know it has been tested on animals you might consider asking your bank who it lends to - as it might just be helping to finance such testing. If you have switched to a green energy provider you might want to consider where your ISA is being invested - it may be in fossil fuels. If you don't buy from a certain store because you suspect their clothes were produced in a sweat shop, consider who insures their premises or owns shares in their company.
There are no dedicated standards or regulators for socially responsible funds so it's important to discuss with your financial adviser about exactly the type of business or area you wish to invest in, or those you wish to avoid, in order to choose the right fund.
Ask your adviser to explain how a fund they have recommended addresses the values you have identified.
But will it make me money?
There's no reason why socially responsible investment can't provide financial as well as moral benefits. Not every opportunity that delivers a high social return will necessarily deliver a high financial return, but neither is there any reason why it may not.
Source: Time For Money