With impending oil price increases, rising food cost and the aftershock of the recent economic crisis, investments in ethical funds have reached a record high.
According to EIRIS, the ethical investment research group, more than £11.3 billion is currently investing in ethical or sustainable funds, an overwhelming increase from just £4 billion in 2011. It has become evident that companies who manage environmental risks and take advantage of associated opportunities outperform companies who don’t.
According to The Investment Management Association, sales into UK ethical funds rose by 25% in the second quarter of 2011 compared with the same last here.
NEWSWEEK’s Green Rankings showed that companies that ranked in the top 100 of the 2009 ranking, weighted equally, outperformed the S&P 500 by 4.8 percent over the last two years. These companies are collectively up 15.2 percent, compared to 10.4 percent for the S&P 500.
Mark Robertson from EIRIS said they have seen a huge increase in the amount of money being invested ethically. He added, “Since the credit crunch, people are better informed about the impacts their spending and investments can have, and more are turning to ethical investment which takes a longer-term approach.”
Some of the best-performing ethical funds has been Ecclasiastical’s Amity UK, paying 2.11%, compared with the return on an average of UK company funds at minus 2.35%. IBM’s stock is up more than 100 percent over the last 5 years, while the S&P 500 has been flat. IBM has been a pioneer in energy and water efficiency, and is always on the look-out for environmentally focused revenue opportunities