Demand ethical investment

11 November 2001

Protester demonstrating to Norwich Union the consequences of its investment in climate change

With ethical investment, you aren't investing in some companies whose practices don't match your own personal views. You can also influence companies to improve their ethical or environmental record.

There are many ethical products on the market:

• pensions
• life insurance plans
• ISAs
• unit trusts
• regular savings plans
• investment bonds
• mortgage endowments and many more

In each case, an expert uses your money to buy and sell investments (usually shares) whilst following agreed ethical criteria - such as avoiding excessive polluters or arms manufacturers.

1. Thinking of investing?
2. Already have investments?
3. Have shares?
4. Have a pension?
5. Want to do more?

Thinking of investing?

If you're thinking of investing money for the first time, you need to find an independent financial advisor (IFA).

• You can obtain a list of IFAs who are expert on ethical investment from the Ethical Investment Research Service (EIRIS) by calling 020 7840 5700.

• Your IFA will be able to advise you on which products best suit your financial needs. He or she will also help you apply for them.

• Before meeting your IFA, spend some time deciding what issues particularly concern you - such as climate change, rainforest destruction, cancer-causing chemicals, animal welfare, etc.

• Prepare any questions you want answers to. What are you committing to? What is the return? In many cases, ethical products perform just as well, or better, than ordinary ones. Your IFA should have the figures.

• Finally: this is your future you are dealing with, so don't be afraid to ask awkward questions!

Already have investments?

If you are already committed to an investment plan, and you're concerned about the ethical or environmental impact, there are some important questions to ask.

• Write to the manager of the fund that you hold and ask them what their ethical and environmental policies are.

• Ask them whether they operate any ethical funds and whether you can transfer to them without incurring any penalties.

• Ask which companies they invest in. If you find a company that you are concerned about, ask you fund manager about it and tell them why you are concerned.

Have shares?

If you hold shares personally, and you are worried about the ethical performance of the company, do write and tell the managing director. If nothing improves, you could even threaten to sell your shares. Remember, as a shareholder you have more influence.

Have a pension?

Sample letter

Dear Pension Fund Trustee,

I believe it is important for my pension scheme to take social, environmental and ethical issues into account and that this is in my best interest as a future pensioner. I would like to see this explicitly addressed under the Statement of Investment Principles.

Please could you also let me know if you have any measures for assessing environmental risks in the investments you make. I am particularly concerned about the possible impact on my pension from threats like climate change.

Yours sincerely,