How green is your investment? Ethical investment is explained
Rarely a day to pass without hearing a new proposal to help save the environment. Moral and ethics we often call us to ‘do our bits’. But regardless of efforts made, it seems that many world problems show little dispersion sign.
The ethical problems we warn about don’t stop at global warming and environmental pollution. We are often encouraged to also avoid companies that are considered unethical because they test their products in animals, the practice of loan or gambling is questionable. These are all personal choices that we can make based on our beliefs and ethics. But how many of us know that we can expand this ethical beliefs for our investment?
Is that ethical funds?
Ethics funds are “every fund that decides that shares can be accepted, or not, in accordance with positive or negative ethical criteria (including environmental criteria)” as symbolized by ethical investment research services (EIR).
This gives investors who are careful or ethically to apply their ethical beliefs to choose the funds they invest. Ethical funds must meet social, ethical or additional environmental criteria in addition to other investment criteria. This fund is described as SRI (an investment that is socially responsible.)
This type of ethical funds is divided into several categories based on their green credentials to help investors make decisions based on information when choosing their Sri.
Light green investment
Light green investment is at the lowest end scale. This type of investment often avoids the sector of companies such as gambling, pornography, weapons manufacturers, military, defenses, and usually nuclear energy.
As a step under the stairs of green investment, light green investment often includes a controversial sector where most opinions are divided. This tends to be excluded from a higher SRI level.
Medium green investment
Green investment is playing an intermediary for ethical funds. There are some overlaps between light green and medium investments. But green investment is often avoiding companies such as tobacco and oil / gas companies that are often under this sector.
Dark green investment.
Dark green investors provide investors to the highest level of ethical guarantee by following the most stringent ethical criteria. Investments are included in the dark green ribbon filter outside all sectors that are considered unethical but also see additional areas such as checking that human rights are obeyed correctly in these companies and that there is no evidence of child labor or other violations. Other factors such as animal testing and genetic engineering will also be avoided in this sector. Promotions of renewable or sustainable sources are often preferred.