When preparing to meet an IFA there is so much to think about.  Gathering together all the information about your current savings arrangements, your pension, your mortgage or other debts you might have – as well as thinking through what your goals are for the future.  With all this to think about it is easy to overlook your views on ethical, social or environmental issues – and how you might like to build this into your investment decisions.

The following five questions will help you to prepare for your meeting by helping you to think through how you might to do this:

1. What are my motivations for considering green or ethical investment? 
   • Making the most of the investment opportunities presented by companies that have stronger environmental, social and/or ethical standards than their competitors
   • Making the most of investment opportunities presented by companies that are leading the way in solving environmental or social challenges
   • Encouraging companies to adopt better, more sustainable business practices
   • Avoiding certain companies, sectors or business practices that you do not wish to invest in
   • Using share ownership and voting rights  to encourage companies to be more responsible
   • Investing in line with your personal values, opinions or beliefs
   • A combination of the above

 

2. What issues am I most interested in? 
   • Environmental – for example; climate change, pollution, biodiversity, environmental management, waste, use of natural resources – including water, forestry, mining
   • Ethical –  such as avoiding areas such as  tobacco, armaments, pornography, alcohol, bribery and corruption, irresponsible marketing or advertising
   • Social – issues that relate to people – including human rights, equal opportunities, labour standards, child labour, food and water supply
   • Governance – primarily issues relating to company management, including; board structure, executive remuneration, bonuses, avoidance of bribery and corruption
   • Animals – for example animal welfare relating to factory farming, animal testing (particularly for cosmetics, medical or pharmaceutical purposes) and the fur trade

 

3. What approach would I ideally like to take to each of these issues?
   • Supporting companies, that are doing positive, beneficial or desirable things by investing in them
   • Avoiding companies that are involved in practices that I do not wish to encourage or invest in
   • Encouraging positive change through dialogue and shareholder engagement or activism where there is a business case for encouraging positive change
   • A combination of the above

 

4. Would I prefer to invest all or some of my money in a green, ethical, sustainable or responsible way?

Subject to the minimum investment limits that often apply – the amount of money you put into any of these investments is up to you.  Investments of this kind do not have to be ‘all or nothing’, mixing and matching to suit your needs is fine.

 

5. What is your attitude to investment risk? 
   • How do you assess which green or ethical investment options are appropriate for clients?
   • How regularly do you advise on green or ethical, sustainable or responsible investments?  
   • How do you keep up to date with what is happening in this market?

This is a complex area that IFAs are experts in dealing with.  It may however be useful for you to know how green and ethical investments fit in.  These investment options come in all shapes and sizes.  Some are relatively low risk others are high risk.  All should be considered longer term investments.

All IFAs can offer advice on green and ethical investment and it is increasingly common for advisers to do so.   Yet as with any area of advice their experience varies.  Whilst some are ‘ethical specialists’ most are not.  If you do not have an adviser already you may wish to speak to a few advisers before deciding who best suits your personal needs.

The following three questions will help you to work out which adviser is most likely to be appropriate for you:

To find an IFA who is experienced in this area you can select the ‘ethical investment’ option on the unbiased.co.uk ‘find an IFA’ search.  

The value of investments can fall as well as rise and this means that you could get back less than you invest. Some funds carry additional risk because of the assets they invest in.

Julia Dreblow / www.sriServices.co.uk